4 Bargain Stocks With Low Price-to-Cash Flow to Record September Gains

Market Overview - Investors are preparing for the "September Effect," which historically leads to market volatility [1] - Major indexes showed mixed performance, with the S&P 500 down 0.3% and the Dow Jones Industrial Average down 0.5%, while the Nasdaq Composite gained about 0.3% [1] - The market's uneven behavior reflects concerns about the economy's health [1] Labor Market Data - A report from ADP indicated that only 99,000 private-sector jobs were created in August, significantly below expectations and marking the smallest increase since 2021 [2] - This disappointing labor market data has raised concerns regarding the overall strength of the labor market [2] Federal Reserve Outlook - There is speculation that the Federal Reserve may consider easing its stance on interest rates in the upcoming policy meeting, with many investors anticipating a quarter-percentage-point rate cut [3] - Market sentiment remains fragile as investors await more clarity on monetary policy direction amidst mixed economic signals [3] Investment Strategies - September is characterized by heightened uncertainty, making value stocks a potentially safer investment option [4] - Value investing focuses on selecting fundamentally sound stocks that have been undervalued due to external factors, with the potential for recovery as investors recognize their inherent value [5] Valuation Metrics - The Price to Cash Flow (P/CF) ratio is highlighted as a key metric for assessing a company's financial health, with lower values indicating better performance [6][7] - Positive cash flow is essential for a company's liquidity, enabling it to meet obligations and reinvest in its business [9] Stock Selection Criteria - Parameters for selecting true value stocks include a P/CF ratio less than or equal to the industry median, a minimum stock price of $5, and a significant average trading volume [11][12] - Additional criteria include P/E, P/B, and P/S ratios being less than or equal to the industry median, along with a PEG ratio of less than 1 and a favorable Zacks Rank [10][13][14] Company Highlights - Universal Health Services (UHS) has a Zacks Rank of 1, with a trailing four-quarter earnings surprise of 14.6% and a Value Score of A, with shares up 86.8% in the past year [15][16] - EnerSys (ENS) holds a Zacks Rank of 2, with a trailing four-quarter earnings surprise of 1.5% and shares rising 1.1% in the past year [16] - Kinross Gold Corporation (KGC) also has a Zacks Rank of 2, with a trailing four-quarter earnings surprise of 29.2% and shares advancing 82.9% in the past year [17][18] - Unum Group (UNM) carries a Zacks Rank of 2, with a trailing four-quarter earnings surprise of 3% and shares gaining 15.3% in the past year [18][19]