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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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 Subaru Corporation (FUJHY). FUJHY is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 4.73 right now. For comparison, its industry sports an average P/E of 8.60. Over the past 52 weeks, FUJHY's Forward P/E has been as high as 7.29 and as low as 3.59, with a median of 5.60.
Investors should also note that FUJHY holds a PEG ratio of 0.19. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. FUJHY's PEG compares to its industry's average PEG of 0.45. Over the past 52 weeks, FUJHY's PEG has been as high as 0.30 and as low as 0.15, with a median of 0.23.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. FUJHY has a P/S ratio of 0.42. This compares to its industry's average P/S of 0.53.
Finally, investors will want to recognize that FUJHY has a P/CF ratio of 3.23. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. FUJHY's P/CF compares to its industry's average P/CF of 3.96. Over the past 52 weeks, FUJHY's P/CF has been as high as 4.28 and as low as 2.77, with a median of 3.25.
Value investors will likely look at more than just these metrics, but the above data helps show that Subaru Corporation is likely undervalued currently. And when considering the strength of its earnings outlook, FUJHY sticks out at as one of the market's strongest value stocks.