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 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.
One company value investors might notice is Turtle Beach (HEAR). HEAR is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock’s price with the company’s 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. HEAR has a P/S ratio of 0.91. This compares to its industry’s average P/S of 1.61.
Finally, our model also underscores that HEAR has a P/CF ratio of 9.69. This data point considers a firm’s operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock’s P/CF looks attractive against its industry’s average P/CF of 9.97. Over the past 52 weeks, HEAR’s P/CF has been as high as 13.46 and as low as 2.81, with a median of 5.61.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Turtle Beach is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, HEAR feels like a great value stock at the moment.
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