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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.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 stock to keep an eye on is MS&AD Insurance Group (MSADY). MSADY is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
Another valuation metric that we should highlight is MSADY's P/B ratio of 1.33. 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. This stock's P/B looks solid versus its industry's average P/B of 1.62. MSADY's P/B has been as high as 1.35 and as low as 0.87, with a median of 1.22, over the past year.
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. MSADY has a P/S ratio of 0.83. This compares to its industry's average P/S of 1.26.
Value investors will likely look at more than just these metrics, but the above data helps show that MS&AD Insurance Group is likely undervalued currently. And when considering the strength of its earnings outlook, MSADY sticks out at as one of the market's strongest value stocks.
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MS&AD Insurance Group Holdings Inc. (MSADY) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).