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, 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 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.
Greif (GEF) is a stock many investors are watching right now. GEF is currently sporting a Zacks Rank #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 14.13 right now. For comparison, its industry sports an average P/E of 15.01. Over the last 12 months, GEF's Forward P/E has been as high as 15.00 and as low as 11.05, with a median of 13.14.
GEF is also sporting a PEG ratio of 1.43. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. GEF's industry currently sports an average PEG of 2.83. Over the last 12 months, GEF's PEG has been as high as 1.66 and as low as 0.79, with a median of 1.05.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. GEF has a P/S ratio of 0.58. This compares to its industry's average P/S of 0.98.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Greif is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, GEF feels like a great value stock at the moment.
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Greif, Inc. (GEF): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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