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.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 Tactile Systems Technology (TCMD). TCMD is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 21.02, while its industry has an average P/E of 32.16. Over the past year, TCMD's Forward P/E has been as high as 34.63 and as low as 13.86, with a median of 19.22.
Another notable valuation metric for TCMD is its P/B ratio of 2.05. The P/B ratio is used to compare a stock's market value with 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 4.12. Over the past 12 months, TCMD's P/B has been as high as 2.23 and as low as 1.34, with a median of 1.69.
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. TCMD has a P/S ratio of 1.51. This compares to its industry's average P/S of 2.82.
Finally, our model also underscores that TCMD has a P/CF ratio of 19.62. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. TCMD's current P/CF looks attractive when compared to its industry's average P/CF of 23.32. Over the past 52 weeks, TCMD's P/CF has been as high as 21.40 and as low as 6.94, with a median of 9.77.
These are only a few of the key metrics included in Tactile Systems Technology's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, TCMD looks like an impressive value stock at the moment.
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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.
