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.
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 stock to keep an eye on is Hibbett Sports (HIBB). HIBB is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 10.18, which compares to its industry's average of 14.36. Over the past year, HIBB's Forward P/E has been as high as 15.06 and as low as 7.76, with a median of 10.83.
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. HIBB has a P/S ratio of 0.37. This compares to its industry's average P/S of 0.38.
Finally, we should also recognize that HIBB has a P/CF ratio of 6.31. 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 20.98. Over the past year, HIBB's P/CF has been as high as 8.84 and as low as 4.40, with a median of 6.03.
These are just a handful of the figures considered in Hibbett Sports'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 HIBB is an impressive value stock right now.
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Hibbett Sports, Inc. (HIBB) : Free Stock Analysis Report
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