Are Investors Undervaluing Healthcare Services Group (HCSG) Right Now?
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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 Healthcare Services Group (HCSG). HCSG is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 14.20 right now. For comparison, its industry sports an average P/E of 21.40. HCSG's Forward P/E has been as high as 28.70 and as low as 11.35, with a median of 16.31, all within the past year.
We should also highlight that HCSG has a P/B ratio of 2.02. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 3.06. Within the past 52 weeks, HCSG's P/B has been as high as 2.63 and as low as 1.46, with a median of 1.99.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. HCSG has a P/S ratio of 0.55. This compares to its industry's average P/S of 1.17.
Finally, investors will want to recognize that HCSG has a P/CF ratio of 16.78. 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. HCSG's current P/CF looks attractive when compared to its industry's average P/CF of 25.76. Over the past year, HCSG's P/CF has been as high as 21.92 and as low as 12.13, with a median of 16.52.
WNS (WNS) may be another strong Business - Services stock to add to your shortlist. WNS is a # 2 (Buy) stock with a Value grade of A.
Shares of WNS are currently trading at a forward earnings multiple of 13.13 and a PEG ratio of 1.21 compared to its industry's P/E and PEG ratios of 21.40 and 1.90, respectively.
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Healthcare Services Group, Inc. (HCSG) : Free Stock Analysis Report
WNS (Holdings) Limited (WNS) : Free Stock Analysis Report
