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Should Value Investors Buy Liberty Global (LBTYA) Stock?

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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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

Liberty Global (LBTYA - Free Report) is a stock many investors are watching right now. LBTYA is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. LBTYA has a P/S ratio of 1.05. This compares to its industry's average P/S of 1.19.

Finally, we should also recognize that LBTYA has a P/CF ratio of 4.10. 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 9.15. LBTYA's P/CF has been as high as 4.80 and as low as 0.73, with a median of 1.52, all within the past year.

These are just a handful of the figures considered in Liberty Global'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 LBTYA is an impressive value stock right now.


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