Are Investors Undervaluing Greenhill & Co., Inc. (GHL) 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.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 Greenhill & Co., Inc. (GHL). GHL is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 12 right now. For comparison, its industry sports an average P/E of 12.87. Over the last 12 months, GHL's Forward P/E has been as high as 207.72 and as low as -288.86, with a median of 11.21.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. GHL has a P/S ratio of 1.12. This compares to its industry's average P/S of 2.21.
Finally, our model also underscores that GHL has a P/CF ratio of 12.35. 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. This stock's P/CF looks attractive against its industry's average P/CF of 14.85. Over the past year, GHL's P/CF has been as high as 15.12 and as low as -76.37, with a median of 8.56.
Value investors will likely look at more than just these metrics, but the above data helps show that Greenhill & Co., Inc. Is likely undervalued currently. And when considering the strength of its earnings outlook, GHL sticks out at as one of the market's strongest value stocks.
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