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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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 value investors might notice is Science Applications International (SAIC). SAIC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 12.59. This compares to its industry's average Forward P/E of 31.65. Over the past 52 weeks, SAIC's Forward P/E has been as high as 17.39 and as low as 10.50, with a median of 13.74.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. SAIC has a P/S ratio of 0.76. This compares to its industry's average P/S of 1.98.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Science Applications International is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SAIC feels like a great value stock at the moment.
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Science Applications International Corporation (SAIC) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
