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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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 company to watch right now is United Fire Group (UFCS). UFCS is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock has a Forward P/E ratio of 11.30. This compares to its industry's average Forward P/E of 29.89. Over the past 52 weeks, UFCS's Forward P/E has been as high as 20.50 and as low as 10.38, with a median of 15.15.
Another valuation metric that we should highlight is UFCS's P/B ratio of 0.90. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. UFCS's current P/B looks attractive when compared to its industry's average P/B of 1.69. UFCS's P/B has been as high as 1.02 and as low as 0.62, with a median of 0.76, over the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. UFCS has a P/S ratio of 0.57. This compares to its industry's average P/S of 1.23.
These are just a handful of the figures considered in United Fire Group's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that UFCS is an impressive value stock right now.
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