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 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 Computer Task Group (CTG). CTG 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 17.38. This compares to its industry’s average Forward P/E of 30.47. Over the past year, CTG’s Forward P/E has been as high as 17.76 and as low as 11.84, with a median of 14.22.
Investors should also note that CTG holds a PEG ratio of 0.87. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company’s expected earnings growth rate. CTG’s PEG compares to its industry’s average PEG of 2.46. Within the past year, CTG’s PEG has been as high as 1.18 and as low as 0.74, with a median of 0.89.
Finally, our model also underscores that CTG has a P/CF ratio of 13.70. 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. CTG’s current P/CF looks attractive when compared to its industry’s average P/CF of 36.28. Over the past 52 weeks, CTG’s P/CF has been as high as 13.83 and as low as 6.25, with a median of 7.78.
These are only a few of the key metrics included in Computer Task Group’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, CTG looks like an impressive value stock at the moment.
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