Is Convergys (CVG) Stock Undervalued Right Now?
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.
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 value investors might notice is Convergys (CVG). CVG is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 14.51, which compares to its industry's average of 23.19. Over the past 52 weeks, CVG's Forward P/E has been as high as 15 and as low as 11.50, with a median of 13.56.
CVG is also sporting a PEG ratio of 1.93. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CVG's PEG compares to its industry's average PEG of 2.24. CVG's PEG has been as high as 1.95 and as low as 1.23, with a median of 1.47, all within the past year.
Finally, investors will want to recognize that CVG has a P/CF ratio of 11.53. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. CVG's P/CF compares to its industry's average P/CF of 19.28. CVG's P/CF has been as high as 11.86 and as low as 8.19, with a median of 9.18, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Convergys is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CVG feels like a great value stock at the moment.
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