Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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.
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 CrossAmerica Partners (CAPL). CAPL is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CAPL has a P/S ratio of 0.18. This compares to its industry's average P/S of 0.51.
Finally, we should also recognize that CAPL has a P/CF ratio of 7.48. 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. CAPL's current P/CF looks attractive when compared to its industry's average P/CF of 8.03. Over the past 52 weeks, CAPL's P/CF has been as high as 8.51 and as low as 5.25, with a median of 7.15.
These are just a handful of the figures considered in CrossAmerica Partners's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that CAPL is an impressive value stock right now.
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CrossAmerica Partners LP (CAPL) : Free Stock Analysis Report
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