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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company to watch right now is Perion Network (PERI). PERI is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 8.73 right now. For comparison, its industry sports an average P/E of 23.47. Over the past year, PERI's Forward P/E has been as high as 9.48 and as low as 4.66, with a median of 6.97.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. PERI has a P/S ratio of 0.8. This compares to its industry's average P/S of 1.02.
Finally, investors will want to recognize that PERI has a P/CF ratio of 14.79. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 49.42. Over the past year, PERI's P/CF has been as high as 16.59 and as low as 3.49, with a median of 6.35.
These are just a handful of the figures considered in Perion Network's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that PERI is an impressive value stock right now.
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This article originally published on Zacks Investment Research (zacks.com).