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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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 stock to keep an eye on is Laureate Education (LAUR). LAUR 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 12.79, which compares to its industry's average of 16.89. LAUR's Forward P/E has been as high as 13.71 and as low as 9.26, with a median of 10.77, all within the past year.
We should also highlight that LAUR has a P/B ratio of 3.10. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. LAUR's current P/B looks attractive when compared to its industry's average P/B of 3.31. Within the past 52 weeks, LAUR's P/B has been as high as 3.32 and as low as 2.08, with a median of 2.50.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. LAUR has a P/S ratio of 1.8. This compares to its industry's average P/S of 1.86.
Value investors will likely look at more than just these metrics, but the above data helps show that Laureate Education is likely undervalued currently. And when considering the strength of its earnings outlook, LAUR sticks out at as one of the market's strongest value stocks.
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Laureate Education (LAUR) : Free Stock Analysis Report