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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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is Subaru Corporation (FUJHY). FUJHY is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 3.68 right now. For comparison, its industry sports an average P/E of 8.20. FUJHY's Forward P/E has been as high as 7.29 and as low as 3.64, with a median of 6.10, all within the past year.
Investors will also notice that FUJHY has a PEG ratio of 0.15. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. FUJHY's industry currently sports an average PEG of 0.41. Over the last 12 months, FUJHY's PEG has been as high as 0.30 and as low as 0.15, with a median of 0.25.
Another valuation metric that we should highlight is FUJHY's P/B ratio of 0.73. 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 attractive against its industry's average P/B of 0.98. Within the past 52 weeks, FUJHY's P/B has been as high as 1.07 and as low as 0.67, with a median of 0.89.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. FUJHY has a P/S ratio of 0.39. This compares to its industry's average P/S of 0.45.
Finally, our model also underscores that FUJHY has a P/CF ratio of 3.02. 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 4.24. Over the past 52 weeks, FUJHY's P/CF has been as high as 4.28 and as low as 2.77, with a median of 3.65.