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Should Value Investors Buy Dish Network (DISH) Stock?

Sonoco (SON) delivered earnings and revenue surprises of -2.06% and -4.16%, respectively, for the quarter ended June 2019. Do the numbers hold clues to what lies ahead for the stock?

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.

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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 Dish Network (DISH). DISH is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 13.60 right now. For comparison, its industry sports an average P/E of 18.39. Over the past 52 weeks, DISH's Forward P/E has been as high as 25.34 and as low as 11.52, with a median of 14.61.

Another notable valuation metric for DISH is its P/B ratio of 1.87. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. DISH's current P/B looks attractive when compared to its industry's average P/B of 2.94. Within the past 52 weeks, DISH's P/B has been as high as 4.37 and as low as 1.59, with a median of 2.15.

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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. DISH has a P/S ratio of 1.11. This compares to its industry's average P/S of 2.23.

Finally, our model also underscores that DISH has a P/CF ratio of 5.17. 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. DISH's P/CF compares to its industry's average P/CF of 6.25. Over the past year, DISH's P/CF has been as high as 14.15 and as low as 4.39, with a median of 5.93.

Value investors will likely look at more than just these metrics, but the above data helps show that Dish Network is likely undervalued currently. And when considering the strength of its earnings outlook, DISH sticks out at as one of the market's strongest value stocks.

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