Yahoo Finance Are Investors Undervaluing PriceSmart (PSMT) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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.
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 PriceSmart (PSMT). PSMT is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 16.18 right now. For comparison, its industry sports an average P/E of 28.37. Over the past 52 weeks, PSMT's Forward P/E has been as high as 17.56 and as low as 15.25, with a median of 16.42.
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. PSMT has a P/S ratio of 0.54. This compares to its industry's average P/S of 0.86.
Finally, investors should note that PSMT has a P/CF ratio of 12.30. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 27.57. Over the past year, PSMT's P/CF has been as high as 13.49 and as low as 10.59, with a median of 12.35.
These are only a few of the key metrics included in PriceSmart'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, PSMT looks like an impressive value stock at the moment.
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PriceSmart, Inc. (PSMT) : Free Stock Analysis Report
