Core Insights - The article discusses the limitations of the price-to-earnings (P/E) ratio and promotes the EV-to-EBITDA ratio as a more effective valuation metric for stocks [1][2][3] Valuation Metrics - P/E ratio is widely used but has drawbacks, particularly in valuing loss-making firms and being susceptible to accounting manipulations [5] - EV-to-EBITDA is considered a better alternative as it accounts for a company's debt and provides a clearer picture of profitability by excluding non-cash expenses [3][4] - A lower EV-to-EBITDA ratio indicates a potentially undervalued stock and is often used to identify attractive acquisition targets [4] Screening Criteria for Bargain Stocks - Parameters for screening include: - EV-to-EBITDA ratio lower than the industry median [7] - P/E ratio lower than the industry median [7] - Price-to-book (P/B) ratio lower than the industry median [7] - Price-to-sales (P/S) ratio lower than the industry median [8] - Estimated one-year EPS growth greater than or equal to the industry median [9] - Average 20-day volume greater than or equal to 50,000 [10] - Current price greater than or equal to $5 [10] - Zacks Rank of 1 or 2 [11] - Value Score of A or B [11] Stock Picks - El Pollo Loco Holdings, Inc. (LOCO) has a Zacks Rank of 1 and an expected earnings growth rate of 16.9% for 2024, with a recent upward revision of 3.8% [12] - EZCORP, Inc. (EZPW) holds a Zacks Rank of 2 with an expected earnings growth rate of 11.6% for fiscal 2025, revised upward by 1.6% [13][14] - Mattel, Inc. (MAT) is also a Zacks Rank 2 stock with an expected growth rate of 18.7% for 2024, revised upward by 2.1% [14] - OppFi Inc. (OPFI) has a Zacks Rank of 2 and an impressive expected growth rate of 68.6% for 2024, with a significant upward revision of 16.2% [15] - Avangrid, Inc. (AGR) is a Zacks Rank 2 stock with an expected growth rate of 12% for 2024, revised upward by 4.5% [16]