Is Ruth's Hospitality Group (RUTH) a Great Value Stock Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is Ruth's Hospitality Group (RUTH). RUTH is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 11.59 right now. For comparison, its industry sports an average P/E of 23.98. Over the last 12 months, RUTH's Forward P/E has been as high as 19.50 and as low as 10.44, with a median of 14.02.
Investors should also note that RUTH holds a PEG ratio of 0.73. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. RUTH's PEG compares to its industry's average PEG of 2.07. Within the past year, RUTH's PEG has been as high as 1.30 and as low as 0.73, with a median of 0.96.
Finally, investors should note that RUTH has a P/CF ratio of 9.99. 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 16.91. RUTH's P/CF has been as high as 19.81 and as low as 8.51, with a median of 11.47, all within the past year.
These are just a handful of the figures considered in Ruth's Hospitality Group's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that RUTH is an impressive value stock right now.
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