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Should Value Investors Buy Sirius XM (SIRI) Stock?

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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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 to watch right now is Sirius XM (SIRI - Free Report) . SIRI is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

We also note that SIRI holds a PEG ratio of 1.19. 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. SIRI's PEG compares to its industry's average PEG of 1.86. SIRI's PEG has been as high as 2.70 and as low as 0.68, with a median of 1.14, all within the past year.

Finally, investors will want to recognize that SIRI has a P/CF ratio of 5.37. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 12.66. Over the past 52 weeks, SIRI's P/CF has been as high as 11.86 and as low as 4.61, with a median of 7.12.

Value investors will likely look at more than just these metrics, but the above data helps show that Sirius XM is likely undervalued currently. And when considering the strength of its earnings outlook, SIRI sticks out at as one of the market's strongest value stocks.


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