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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 value investors might notice is E.ON (EONGY). EONGY is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 12.12, while its industry has an average P/E of 14.34. Over the past 52 weeks, EONGY's Forward P/E has been as high as 12.81 and as low as 9.27, with a median of 11.51.
Another valuation metric that we should highlight is EONGY's P/B ratio of 1.55. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 2.22. Within the past 52 weeks, EONGY's P/B has been as high as 1.69 and as low as 1.16, with a median of 1.50.
Finally, we should also recognize that EONGY has a P/CF ratio of 3.96. 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. This stock's P/CF looks attractive against its industry's average P/CF of 10.22. Within the past 12 months, EONGY's P/CF has been as high as 8.64 and as low as 2.96, with a median of 5.47.
These figures are just a handful of the metrics value investors tend to look at, but they help show that E.ON is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, EONGY feels like a great value stock at the moment.
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This article originally published on Zacks Investment Research (zacks.com).