In This Article:
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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 KT (KT). KT is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 6.45, which compares to its industry's average of 8.39. Over the past year, KT's Forward P/E has been as high as 18.18 and as low as 6.05, with a median of 7.15.
Investors should also note that KT holds a PEG ratio of 0.36. 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. KT's PEG compares to its industry's average PEG of 0.57. Within the past year, KT's PEG has been as high as 1.64 and as low as 0.36, with a median of 0.88.
Investors should also recognize that KT has a P/B ratio of 0.68. The P/B ratio pits a stock's market value against 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 0.80. Over the past 12 months, KT's P/B has been as high as 0.70 and as low as 0.42, with a median of 0.53.
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. KT has a P/S ratio of 0.47. This compares to its industry's average P/S of 1.32.
Finally, investors should note that KT has a P/CF ratio of 2.21. 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. KT's current P/CF looks attractive when compared to its industry's average P/CF of 4. KT's P/CF has been as high as 2.29 and as low as 1.39, with a median of 1.72, all within the past year.