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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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 value investors might notice is Wartsila (WRTBY). WRTBY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 23.37, which compares to its industry's average of 48.87. Over the past 52 weeks, WRTBY's Forward P/E has been as high as 31.24 and as low as 20.01, with a median of 25.43.
Investors should also recognize that WRTBY has a P/B ratio of 4.50. 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 12.26. Over the past year, WRTBY's P/B has been as high as 5.70 and as low as 3.83, with a median of 4.84.
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. WRTBY has a P/S ratio of 1.57. This compares to its industry's average P/S of 1.96.
Value investors will likely look at more than just these metrics, but the above data helps show that Wartsila is likely undervalued currently. And when considering the strength of its earnings outlook, WRTBY sticks out at as one of the market's strongest value stocks.
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Wartsila (WRTBY) : Free Stock Analysis Report