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.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 Conduent (CNDT). CNDT is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 9.75. This compares to its industry’s average Forward P/E of 24.89. Over the past year, CNDT’s Forward P/E has been as high as 12.77 and as low as 5.83, with a median of 9.90.
Finally, investors should note that CNDT has a P/CF ratio of 5.20. This metric takes into account a company’s operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. CNDT’s P/CF compares to its industry’s average P/CF of 17.12. CNDT’s P/CF has been as high as 5.63 and as low as 1.64, with a median of 3.92, 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 Conduent is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CNDT feels like a great value stock at the moment.
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