Should Value Investors Buy ASGN Inc (ASGN) 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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is ASGN Inc (ASGN). ASGN is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 16.65, while its industry has an average P/E of 29.33. Over the past year, ASGN's Forward P/E has been as high as 18.19 and as low as 6.30, with a median of 13.27.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. ASGN has a P/S ratio of 0.89. This compares to its industry's average P/S of 2.3.
Finally, our model also underscores that ASGN has a P/CF ratio of 13.49. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 36.28. Over the past year, ASGN's P/CF has been as high as 14.47 and as low as 6.11, with a median of 12.36.
These are only a few of the key metrics included in ASGN Inc's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, ASGN looks like an impressive value stock at the moment.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.