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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.
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 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 company value investors might notice is Synchrony Financial (SYF). SYF is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 6.90. This compares to its industry's average Forward P/E of 14.46. SYF's Forward P/E has been as high as 10.68 and as low as 6.58, with a median of 8.23, all within the past year.
SYF is also sporting a PEG ratio of 0.59. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. SYF's industry has an average PEG of 0.94 right now. Over the past 52 weeks, SYF's PEG has been as high as 1.31 and as low as 0.56, with a median of 1.
Investors should also recognize that SYF has a P/B ratio of 1.38. 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 attractive against its industry's average P/B of 2.62. SYF's P/B has been as high as 1.81 and as low as 1.13, with a median of 1.36, 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. SYF has a P/S ratio of 0.92. This compares to its industry's average P/S of 1.8.
Finally, investors should note that SYF has a P/CF ratio of 5.41. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. SYF's P/CF compares to its industry's average P/CF of 15.74. Within the past 12 months, SYF's P/CF has been as high as 7.46 and as low as 4.77, with a median of 5.75.