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Should Value Investors Buy DICK'S Sporting Goods (DKS) Stock?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 DICK'S Sporting Goods (DKS - Free Report) . DKS is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 15.95, while its industry has an average P/E of 16.88. Over the last 12 months, DKS's Forward P/E has been as high as 16.96 and as low as 8.09, with a median of 11.48.

Another notable valuation metric for DKS is its P/B ratio of 6.87. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. DKS's current P/B looks attractive when compared to its industry's average P/B of 19.41. Over the past year, DKS's P/B has been as high as 6.97 and as low as 3.25, with a median of 4.96.

Finally, investors will want to recognize that DKS has a P/CF ratio of 13.27. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. DKS's current P/CF looks attractive when compared to its industry's average P/CF of 20.31. Over the past 52 weeks, DKS's P/CF has been as high as 13.46 and as low as 6.33, with a median of 9.08.

These figures are just a handful of the metrics value investors tend to look at, but they help show that DICK'S Sporting Goods is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, DKS feels like a great value stock at the moment.


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