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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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 Patterson Cos. (PDCO). PDCO is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 13.85 right now. For comparison, its industry sports an average P/E of 17.38. PDCO's Forward P/E has been as high as 16.31 and as low as 11.42, with a median of 14.20, all within the past year.
Finally, we should also recognize that PDCO has a P/CF ratio of 13.89. 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. PDCO's P/CF compares to its industry's average P/CF of 37.65. Over the past 52 weeks, PDCO's P/CF has been as high as 16 and as low as 7.56, with a median of 12.44.
These are only a few of the key metrics included in Patterson Cos.'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, PDCO looks like an impressive value stock at the moment.
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Patterson Companies, Inc. (PDCO): Free Stock Analysis Report
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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.