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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
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.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is DHL Group Sponsored ADR (DHLGY). DHLGY is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 12.30, which compares to its industry's average of 15.23. Over the last 12 months, DHLGY's Forward P/E has been as high as 13.53 and as low as 9.70, with a median of 11.74.
Another notable valuation metric for DHLGY is its P/B ratio of 2. 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 2.77. Over the past 12 months, DHLGY's P/B has been as high as 2.16 and as low as 1.56, with a median of 1.81.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. DHLGY has a P/S ratio of 0.55. This compares to its industry's average P/S of 0.79.
Finally, investors will want to recognize that DHLGY has a P/CF ratio of 5.75. 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. DHLGY's current P/CF looks attractive when compared to its industry's average P/CF of 12.71. DHLGY's P/CF has been as high as 6.24 and as low as 4.51, with a median of 5.59, all within the past year.
These are just a handful of the figures considered in DHL Group Sponsored ADR'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 DHLGY is an impressive value stock right now.