Should Value Investors Buy Information Services Group (III) 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.

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 value investors might notice is Information Services Group (III). III is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 15.07, while its industry has an average P/E of 15.34. Over the past 52 weeks, III's Forward P/E has been as high as 17.33 and as low as 8.54, with a median of 12.45.

We also note that III holds a PEG ratio of 0.84. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. III's PEG compares to its industry's average PEG of 1.42. Over the past 52 weeks, III's PEG has been as high as 1.20 and as low as 0.59, with a median of 0.79.

We should also highlight that III has a P/B ratio of 2.76. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 4.70. Over the past 12 months, III's P/B has been as high as 2.84 and as low as 1.52, with a median of 1.86.

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. III has a P/S ratio of 0.77. This compares to its industry's average P/S of 1.27.

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

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Information Services Group, Inc. (III): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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