In This Article:
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company value investors might notice is Yara International ASA (YARIY). YARIY is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 11.23, which compares to its industry's average of 14.49. YARIY's Forward P/E has been as high as 13.77 and as low as 9.27, with a median of 11.56, all within the past year.
Another valuation metric that we should highlight is YARIY's P/B ratio of 1.18. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. YARIY's current P/B looks attractive when compared to its industry's average P/B of 2.17. Within the past 52 weeks, YARIY's P/B has been as high as 1.18 and as low as 0.87, with a median of 1.01.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. YARIY has a P/S ratio of 0.6. This compares to its industry's average P/S of 1.4.
Finally, our model also underscores that YARIY has a P/CF ratio of 6.20. 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 14.74. Over the past 52 weeks, YARIY's P/CF has been as high as 8.21 and as low as 4.21, with a median of 6.15.