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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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company value investors might notice is Yara International ASA (YARIY). YARIY is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 10.57 right now. For comparison, its industry sports an average P/E of 12.54. Over the last 12 months, YARIY's Forward P/E has been as high as 13.77 and as low as 9.32, with a median of 11.56.
Investors should also recognize that YARIY has a P/B ratio of 1.06. 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 1.95. Over the past year, YARIY's P/B has been as high as 1.18 and as low as 0.87, with a median of 1.01.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. YARIY has a P/S ratio of 0.5. This compares to its industry's average P/S of 0.96.
Finally, we should also recognize that YARIY has a P/CF ratio of 6.97. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. YARIY's current P/CF looks attractive when compared to its industry's average P/CF of 13.23. YARIY's P/CF has been as high as 8.55 and as low as 4.21, with a median of 6.48, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Yara International ASA is likely undervalued currently. And when considering the strength of its earnings outlook, YARIY sticks out at as one of the market's strongest value stocks.