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Are These Consumer Discretionary Stocks a Great Value Stocks Right Now?

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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, 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.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company to watch right now is Stride (LRN - Free Report) . LRN is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.

We should also highlight that LRN has a P/B ratio of 1.87. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 3.66. LRN's P/B has been as high as 2.24 and as low as 1.39, with a median of 1.76, over the past year.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. LRN has a P/S ratio of 0.91. This compares to its industry's average P/S of 0.92.

If you're looking for another solid Schools value stock, take a look at Universal Technical Institute (UTI - Free Report) . UTI is a # 2 (Buy) stock with a Value score of A.

Universal Technical Institute is currently trading with a Forward P/E ratio of 13.18 while its PEG ratio sits at 0.88. Both of the company's metrics compare favorably to its industry's average P/E of 66.81 and average PEG ratio of 4.70.

Over the past year, UTI's P/E has been as high as 21.02, as low as 10.38, with a median of 13.95; its PEG ratio has been as high as 1.40, as low as 0.69, with a median of 0.88 during the same time period.

Furthermore, Universal Technical Institute holds a P/B ratio of 1.98 and its industry's price-to-book ratio is 3.66. UTI's P/B has been as high as 2.48, as low as 1.62, with a median of 1.90 over the past 12 months.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Stride and Universal Technical Institute are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, LRN and UTI feels like a great value stock at the moment.


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