Should Value Investors Buy Santander Consumer (SC) Stock?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
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.
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.
Santander Consumer (SC) is a stock many investors are watching right now. SC is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
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. SC has a P/S ratio of 1.51. This compares to its industry's average P/S of 1.67.
Finally, we should also recognize that SC has a P/CF ratio of 3.30. 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. SC's P/CF compares to its industry's average P/CF of 5.32. SC's P/CF has been as high as 3.30 and as low as 2.03, with a median of 2.42, all within the past year.
These are just a handful of the figures considered in Santander Consumer'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 SC is an impressive value stock right now.
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Santander Consumer USA Holdings Inc. (SC) : Free Stock Analysis Report
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