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At Zacks, we focus on our proven ranking system, which emphasizes earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we’re constantly on the lookout for the latest trends in value, growth and momentum to find strong companies for our readers.
Looking at the history of these trends, there is perhaps nothing more beloved than value investing. The strategy is simply to identify companies that are undervalued by the broader market. Value investors use a variety of methods, including proven valuation metrics, to find these stocks.
Zacks has developed an innovative Style Scores system to highlight stocks with specific characteristics. For example, value investors will be interested in highly rated stocks in the “value” category. When compared to a high Zacks Rank, an “A” grade in the Value category is one of the strongest value stocks on the market today.
Caesars Entertainment (Czech Republic – free report) It is a stock that many investors are paying attention to right now. CZR currently holds a Zacks Rank #2 (Buy) and a Value Grade A.
Another notable valuation metric for CZR is its price-to-book ratio of 2.30. P/B is a way to compare a stock’s market value to its book value, which is defined as total assets minus total liabilities. The stock’s price-to-book ratio looks solid compared to its industry average of 2.59. In the past year, the highest P/B of CZR was 4.50, the lowest was 1.78, and the median was 2.79.
Value investors also often use the P/S ratio. The metric is calculated by dividing the stock price by the company’s revenue. Some people prefer this metric because sales are harder to manipulate on the income statement. This means it may be a truer indicator of performance. CZR has a price-to-sales ratio of 0.81. This compares to its industry average P/S of 1.02.
These are just a few key metrics included in Caesars Entertainment’s strong Value grade, but they help suggest that the stock may be undervalued right now. Given the strength of its earnings outlook, CZR looks like an impressive value stock right now.
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