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.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 company to watch right now is DLH Holdings (DLHC). DLHC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 10.27, which compares to its industry's average of 14.58. Over the last 12 months, DLHC's Forward P/E has been as high as 18.84 and as low as 8.42, with a median of 13.34.
Another valuation metric that we should highlight is DLHC's P/B ratio of 1.74. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. DLHC's current P/B looks attractive when compared to its industry's average P/B of 2.69. Over the past year, DLHC's P/B has been as high as 2.07 and as low as 1.28, with a median of 1.75.
Finally, investors will want to recognize that DLHC has a P/CF ratio of 8.67. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 12.25. DLHC's P/CF has been as high as 29.10 and as low as 6.75, with a median of 19.97, all within the past year.
These are just a handful of the figures considered in DLH Holdings'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 DLHC is an impressive value stock right now.
DLH Holdings Corp. (DLHC): Free Stock Analysis Report
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