Are Investors Undervaluing Telephone & Data Systems (TDS) Right Now?

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company to watch right now is Telephone & Data Systems (TDS). TDS is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 17.65, while its industry has an average P/E of 20.46. Over the past year, TDS's Forward P/E has been as high as 29.25 and as low as 13.61, with a median of 18.57.

Finally, we should also recognize that TDS has a P/CF ratio of 2.01. 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 2.07. Within the past 12 months, TDS's P/CF has been as high as 2.80 and as low as 1.68, with a median of 2.03.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Telephone & Data Systems is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, TDS feels like a great value stock at the moment.

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