Should Value Investors Buy Great Elm Capital Group, Inc. (GECC) Stock?
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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 value investors might notice is Great Elm Capital Group, Inc. (GECC). GECC is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 5.62, while its industry has an average P/E of 12.75. GECC's Forward P/E has been as high as 8.80 and as low as 2.65, with a median of 7.75, all within the past year.
Another valuation metric that we should highlight is GECC's P/B ratio of 0.82. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.96. Over the past 12 months, GECC's P/B has been as high as 0.98 and as low as 0.30, with a median of 0.85.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. GECC has a P/S ratio of 1.47. This compares to its industry's average P/S of 1.78.
These are just a handful of the figures considered in Great Elm Capital Group, Inc.'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 GECC is an impressive value stock right now.
Click to get this free report
Great Elm Capital Group, Inc. (GECC): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research