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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is Denny's (DENN). DENN is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 10.66, while its industry has an average P/E of 25.03. Over the past 52 weeks, DENN's Forward P/E has been as high as 15.78 and as low as 8.75, with a median of 11.34.
We also note that DENN holds a PEG ratio of 1.18. 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. DENN's PEG compares to its industry's average PEG of 1.72. Within the past year, DENN's PEG has been as high as 1.75 and as low as 0.97, with a median of 1.26.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. DENN has a P/S ratio of 0.66. This compares to its industry's average P/S of 0.74.
Finally, investors will want to recognize that DENN has a P/CF ratio of 9.80. 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. DENN's current P/CF looks attractive when compared to its industry's average P/CF of 21.85. Over the past 52 weeks, DENN's P/CF has been as high as 17.17 and as low as 8.71, with a median of 10.47.
Value investors will likely look at more than just these metrics, but the above data helps show that Denny's is likely undervalued currently. And when considering the strength of its earnings outlook, DENN sticks out at as one of the market's strongest value stocks.
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Denny's Corporation (DENN) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
