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Should Value Investors Buy Cinemark (CNK) Stock?

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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company to watch right now is Cinemark (CNK). CNK is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 16.08, while its industry has an average P/E of 16.83. CNK's Forward P/E has been as high as 30.16 and as low as 10.66, with a median of 15.90, all within the past year.

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Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CNK has a P/S ratio of 0.69. This compares to its industry's average P/S of 1.15.

Finally, we should also recognize that CNK has a P/CF ratio of 6.93. 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 stock's P/CF looks attractive against its industry's average P/CF of 13.26. Within the past 12 months, CNK's P/CF has been as high as 192.77 and as low as 4.31, with a median of 7.89.

These are only a few of the key metrics included in Cinemark'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, CNK looks like an impressive value stock at the moment.

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Zacks Investment Research