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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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is Telefonica (TEF). TEF 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 12.20, which compares to its industry's average of 15.54. Over the past 52 weeks, TEF's Forward P/E has been as high as 14.75 and as low as 11.90, with a median of 13.24.
We should also highlight that TEF has a P/B ratio of 0.86. The P/B ratio is used to compare a stock's market value with 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 1.98. Over the past 12 months, TEF's P/B has been as high as 1.04 and as low as 0.65, with a median of 0.89.
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. TEF has a P/S ratio of 0.52. This compares to its industry's average P/S of 1.15.
These are only a few of the key metrics included in Telefonica's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, TEF looks like an impressive value stock at the moment.
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Telefonica SA (TEF) : Free Stock Analysis Report