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.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company value investors might notice is Horizon Technology Finance (HRZN). HRZN 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 6.12, while its industry has an average P/E of 10.41. Over the past year, HRZN's Forward P/E has been as high as 10.80 and as low as 4, with a median of 9.96.
Another notable valuation metric for HRZN is its P/B ratio of 0.72. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.13. HRZN's P/B has been as high as 1.10 and as low as 0.42, with a median of 1.03, over the past year.
Finally, our model also underscores that HRZN has a P/CF ratio of 5.76. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 8.23. Over the past year, HRZN's P/CF has been as high as 10.58 and as low as 3.85, with a median of 9.91.
Value investors will likely look at more than just these metrics, but the above data helps show that Horizon Technology Finance is likely undervalued currently. And when considering the strength of its earnings outlook, HRZN sticks out at as one of the market's strongest value stocks.
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Horizon Technology Finance Corporation (HRZN) : Free Stock Analysis Report
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