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Should Value Investors Buy Construction Partners (ROAD) 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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is Construction Partners (ROAD - Free Report) . ROAD is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
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. ROAD has a P/S ratio of 1.02. This compares to its industry's average P/S of 1.07.
Finally, investors should note that ROAD has a P/CF ratio of 10.76. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 13.37. Over the past year, ROAD's P/CF has been as high as 11.77 and as low as 5.51, with a median of 8.53.
Value investors will likely look at more than just these metrics, but the above data helps show that Construction Partners is likely undervalued currently. And when considering the strength of its earnings outlook, ROAD sticks out at as one of the market's strongest value stocks.
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Should Value Investors Buy Construction Partners (ROAD) 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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is Construction Partners (ROAD - Free Report) . ROAD is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
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. ROAD has a P/S ratio of 1.02. This compares to its industry's average P/S of 1.07.
Finally, investors should note that ROAD has a P/CF ratio of 10.76. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 13.37. Over the past year, ROAD's P/CF has been as high as 11.77 and as low as 5.51, with a median of 8.53.
Value investors will likely look at more than just these metrics, but the above data helps show that Construction Partners is likely undervalued currently. And when considering the strength of its earnings outlook, ROAD sticks out at as one of the market's strongest value stocks.