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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 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 stock to keep an eye on is Premier (PINC). PINC is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 13.80, which compares to its industry's average of 14.40. Over the past year, PINC's Forward P/E has been as high as 19.30 and as low as 8.31, with a median of 13.66.
Another valuation metric that we should highlight is PINC's P/B ratio of 1.03. 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 solid versus its industry's average P/B of 1.48. PINC's P/B has been as high as 1.22 and as low as 0.93, with a median of 1.06, over the past year.
These are only a few of the key metrics included in Premier'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, PINC looks like an impressive value stock at the moment.
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Premier, Inc. (PINC) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).