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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company to watch right now is Hannover Ruck (HVRRY). HVRRY is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 12.03 right now. For comparison, its industry sports an average P/E of 21.97. HVRRY's Forward P/E has been as high as 14.30 and as low as 11.07, with a median of 12.84, all within the past year.
We should also highlight that HVRRY has a P/B ratio of 2.48. 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 6.79. HVRRY's P/B has been as high as 2.83 and as low as 2.26, with a median of 2.50, over the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. HVRRY has a P/S ratio of 1.1. This compares to its industry's average P/S of 3.21.
Finally, our model also underscores that HVRRY has a P/CF ratio of 12.57. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 26.87. Over the past 52 weeks, HVRRY's P/CF has been as high as 18.46 and as low as 12.48, with a median of 15.66.
Value investors will likely look at more than just these metrics, but the above data helps show that Hannover Ruck is likely undervalued currently. And when considering the strength of its earnings outlook, HVRRY sticks out at as one of the market's strongest value stocks.