Is Computer Programs and Systems (CPSI) a Great Value Stock Right Now?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 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 value investors might notice is Computer Programs and Systems (CPSI). CPSI is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
We also note that CPSI holds a PEG ratio of 1.09. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. CPSI's industry has an average PEG of 2.58 right now. Over the last 12 months, CPSI's PEG has been as high as 1.76 and as low as 1.07, with a median of 1.34.
Investors should also recognize that CPSI has a P/B ratio of 2.36. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. CPSI's current P/B looks attractive when compared to its industry's average P/B of 2.91. Over the past year, CPSI's P/B has been as high as 3.35 and as low as 2.32, with a median of 2.95.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CPSI has a P/S ratio of 1.26. This compares to its industry's average P/S of 2.51.
These are just a handful of the figures considered in Computer Programs and Systems'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 CPSI is an impressive value stock right now.
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