Should Value Investors Buy Entravision Communications (EVC) Stock?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 stock to keep an eye on is Entravision Communications (EVC). EVC is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 19.32. This compares to its industry's average Forward P/E of 19.46. Over the past year, EVC's Forward P/E has been as high as 65.08 and as low as 13.32, with a median of 27.46.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. EVC has a P/S ratio of 0.92. This compares to its industry's average P/S of 1.28.
Finally, investors will want to recognize that EVC has a P/CF ratio of 8.46. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 25.22. EVC's P/CF has been as high as 14.22 and as low as 1.91, with a median of 8.17, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Entravision Communications is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, EVC feels like a great 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.