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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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 company to watch right now is Two Harbors Investments Corp (TWO). TWO is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.
We should also highlight that TWO has a P/B ratio of 0.87. 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 0.94. Over the past year, TWO's P/B has been as high as 0.92 and as low as 0.74, with a median of 0.81.
Finally, investors should note that TWO has a P/CF ratio of 4.19. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 11.64. Within the past 12 months, TWO's P/CF has been as high as 9.69 and as low as -16.47, with a median of 4.13.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Two Harbors Investments Corp is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, TWO feels like a great value stock at the moment.
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Two Harbors Investments Corp (TWO) : Free Stock Analysis Report