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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is GMS Inc. (GMS - Free Report) . GMS is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 9.15, which compares to its industry's average of 22.07. Over the past year, GMS's Forward P/E has been as high as 11.12 and as low as 3.22, with a median of 8.41.
Investors will also notice that GMS has a PEG ratio of 0.63. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. GMS's industry currently sports an average PEG of 1.76. Over the past 52 weeks, GMS's PEG has been as high as 1.39 and as low as 0.46, with a median of 1.20.
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. GMS has a P/S ratio of 0.33. This compares to its industry's average P/S of 0.56.
Finally, investors will want to recognize that GMS has a P/CF ratio of 7.50. 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 15.41. Over the past 52 weeks, GMS's P/CF has been as high as 7.50 and as low as 2.27, with a median of 5.96.
These figures are just a handful of the metrics value investors tend to look at, but they help show that GMS Inc. Is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, GMS feels like a great value stock at the moment.
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Should Value Investors Buy GMS Inc. (GMS) Stock?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is GMS Inc. (GMS - Free Report) . GMS is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 9.15, which compares to its industry's average of 22.07. Over the past year, GMS's Forward P/E has been as high as 11.12 and as low as 3.22, with a median of 8.41.
Investors will also notice that GMS has a PEG ratio of 0.63. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. GMS's industry currently sports an average PEG of 1.76. Over the past 52 weeks, GMS's PEG has been as high as 1.39 and as low as 0.46, with a median of 1.20.
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. GMS has a P/S ratio of 0.33. This compares to its industry's average P/S of 0.56.
Finally, investors will want to recognize that GMS has a P/CF ratio of 7.50. 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 15.41. Over the past 52 weeks, GMS's P/CF has been as high as 7.50 and as low as 2.27, with a median of 5.96.
These figures are just a handful of the metrics value investors tend to look at, but they help show that GMS Inc. Is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, GMS feels like a great value stock at the moment.