Is Deluxe (DLX) Stock Undervalued Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
One company value investors might notice is Deluxe (DLX). DLX is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 6.66, which compares to its industry's average of 9.99. Over the past 52 weeks, DLX's Forward P/E has been as high as 9.57 and as low as 5.69, with a median of 7.79.
We should also highlight that DLX has a P/B ratio of 2.13. Investors use the P/B ratio to look at a stock's market value versus 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 2.94. Over the past 12 months, DLX's P/B has been as high as 2.69 and as low as 1.79, with a median of 2.18.
Finally, investors should note that DLX has a P/CF ratio of 7.57. 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. This stock's P/CF looks attractive against its industry's average P/CF of 10.68. DLX's P/CF has been as high as 8.57 and as low as 5.66, with a median of 7.08, all within the past year.
These are only a few of the key metrics included in Deluxe's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, DLX looks like an impressive value stock at the moment.
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