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Are Investors Undervaluing TransAct Technologies (TACT) Right Now?

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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.

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

TransAct Technologies (TACT - Free Report) is a stock many investors are watching right now. TACT is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

Another valuation metric that we should highlight is TACT's P/B ratio of 1.10. 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. This stock's P/B looks attractive against its industry's average P/B of 1.91. Over the past 12 months, TACT's P/B has been as high as 1.98 and as low as 0.86, with a median of 1.23.

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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. TACT has a P/S ratio of 0.79. This compares to its industry's average P/S of 0.89.

Value investors will likely look at more than just these metrics, but the above data helps show that TransAct Technologies is likely undervalued currently. And when considering the strength of its earnings outlook, TACT sticks out at as one of the market's strongest value stocks.


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