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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.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 to watch right now is South Plains (SPFI). SPFI is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 8.20, which compares to its industry's average of 10.30. SPFI's Forward P/E has been as high as 14.38 and as low as 6.47, with a median of 9.80, all within the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. SPFI has a P/S ratio of 1.42. This compares to its industry's average P/S of 2.19.
Finally, investors should note that SPFI has a P/CF ratio of 6.99. 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. SPFI's P/CF compares to its industry's average P/CF of 11. Over the past year, SPFI's P/CF has been as high as 13.08 and as low as 4.68, with a median of 6.77.
These are just a handful of the figures considered in South Plains'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 SPFI is an impressive value stock right now.
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South Plains Financial, Inc. (SPFI) : Free Stock Analysis Report
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