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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 stock to keep an eye on is Brookfield Corporation (BN). BN is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 13.22, while its industry has an average P/E of 16.76. Over the past 52 weeks, BN's Forward P/E has been as high as 14.90 and as low as 9.59, with a median of 11.50.
Another notable valuation metric for BN is its P/B ratio of 0.52. 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 solid versus its industry's average P/B of 0.65. BN's P/B has been as high as 0.61 and as low as 0.38, with a median of 0.44, 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. BN has a P/S ratio of 0.97. This compares to its industry's average P/S of 2.28.
Finally, investors will want to recognize that BN has a P/CF ratio of 8.25. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. BN's current P/CF looks attractive when compared to its industry's average P/CF of 8.70. Over the past 52 weeks, BN's P/CF has been as high as 8.90 and as low as 5.69, with a median of 6.54.
Value investors will likely look at more than just these metrics, but the above data helps show that Brookfield Corporation is likely undervalued currently. And when considering the strength of its earnings outlook, BN sticks out at as one of the market's strongest value stocks.