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.
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.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the “Value” category. Stocks with high Zacks Ranks and “A” grades for Value will be some of the highest-quality value stocks on the market today.
Mr Cooper (COOP) is a stock many investors are watching right now. COOP is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 5.49. This compares to its industry’s average Forward P/E of 7.74. Over the past 52 weeks, COOP’s Forward P/E has been as high as 7.30 and as low as 3.68, with a median of 5.35.
Investors should also recognize that COOP has a P/B ratio of 0.69. Investors use the P/B ratio to look at a stock’s market value versus its book value, which is defined as total assets minus total liabilities. This stock’s P/B looks solid versus its industry’s average P/B of 0.92. Over the past year, COOP’s P/B has been as high as 0.72 and as low as 0.10, with a median of 0.48.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock’s price with the company’s revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. COOP has a P/S ratio of 0.77. This compares to its industry’s average P/S of 1.39.
Finally, our model also underscores that COOP has a P/CF ratio of 1.78. 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 stock’s P/CF looks attractive against its industry’s average P/CF of 4.87. COOP’s P/CF has been as high as 1.78 and as low as 0.15, with a median of 0.94, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Mr Cooper is likely undervalued currently. And when considering the strength of its earnings outlook, COOP sticks out at as one of the market’s strongest value stocks.
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