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.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 company value investors might notice is Inspired Entertainment (INSE). INSE is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value. The stock holds a P/E ratio of 12.8, while its industry has an average P/E of 20.94. Over the past year, INSE’s Forward P/E has been as high as 33.98 and as low as 7.09, with a median of 12.16.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by 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. INSE has a P/S ratio of 0.71. This compares to its industry’s average P/S of 1.64.
Another great Technology Services stock you could consider is Parsons (PSN), which is a Zacks Rank of #2 (Buy) stock with a Value Score of A.
Shares of Parsons are currently trading at a forward earnings multiple of 24.01 and a PEG ratio of 3.63 compared to its industry’s P/E and PEG ratios of 20.94 and 1.07, respectively.
Over the last 12 months, PSN’s P/E has been as high as 32.13, as low as 14.89, with a median of 22.13, and its PEG ratio has been as high as 4.29, as low as 0.80, with a median of 1.93.
Furthermore, Parsons holds a P/B ratio of 3.34 and its industry’s price-to-book ratio is 4.31. PSN’s P/B has been as high as 4.98, as low as 2.32, with a median of 3.12 over the past 12 months.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Inspired Entertainment and Parsons are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, INSE and PSN feels like a great value stock at the moment.
‘ The preceding article may include information circulated by third parties ’
‘ Some details of this article were extracted from the following source finance.yahoo.com ’
