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.
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 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 company to watch right now is Leidos (LDOS). LDOS is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 13.57 right now. For comparison, its industry sports an average P/E of 20.88. Over the past 52 weeks, LDOS's Forward P/E has been as high as 20.34 and as low as 13.57, with a median of 16.45.
Investors should also note that LDOS holds a PEG ratio of 0.92. 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. LDOS's industry currently sports an average PEG of 1.53. Over the last 12 months, LDOS's PEG has been as high as 2.06 and as low as 0.92, with a median of 1.50.
Another valuation metric that we should highlight is LDOS's P/B ratio of 4.01. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 4.39. Within the past 52 weeks, LDOS's P/B has been as high as 5.76 and as low as 3.57, with a median of 4.48.
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. LDOS has a P/S ratio of 1.17. This compares to its industry's average P/S of 1.75.
Finally, our model also underscores that LDOS has a P/CF ratio of 12.80. 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. LDOS's current P/CF looks attractive when compared to its industry's average P/CF of 28.13. Over the past 52 weeks, LDOS's P/CF has been as high as 18.38 and as low as 12.80, with a median of 15.27.