While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. 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 stock to keep an eye on is Fox (FOXA) . FOXA is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 12.66. This compares to its industry's average Forward P/E of 29.65. Over the past year, FOXA's Forward P/E has been as high as 13.77 and as low as 8.87, with a median of 11.71.
FOXA is also sporting a PEG ratio of 1.21. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. FOXA's PEG compares to its industry's average PEG of 1.40. Over the last 12 months, FOXA's PEG has been as high as 2.07 and as low as 1.04, with a median of 1.24.
Another notable valuation metric for FOXA is its P/B ratio of 2.13. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 5.31. Within the past 52 weeks, FOXA's P/B has been as high as 2.27 and as low as 1.44, with a median of 1.85.
Finally, our model also underscores that FOXA has a P/CF ratio of 11.22. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. FOXA's P/CF compares to its industry's average P/CF of 19.35. Within the past 12 months, FOXA's P/CF has been as high as 11.64 and as low as 7.94, with a median of 9.37.
These are just a handful of the figures considered in Fox's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that FOXA is an impressive value stock right now.
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This article originally published on Zacks Investment Research (zacks.com).
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