While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company value investors might notice is Ultra Clean (UCTT). UCTT is currently holding a Zacks Rank #2 (Buy) and a Value grade of A.
Another notable valuation metric for UCTT is its P/B ratio of 1.14. The P/B ratio is used to compare a stock's market value with 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 2.22. UCTT's P/B has been as high as 2.20 and as low as 0.86, with a median of 1.70, over the past year.
Finally, our model also underscores that UCTT has a P/CF ratio of 9.98. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. UCTT's current P/CF looks attractive when compared to its industry's average P/CF of 13.84. UCTT's P/CF has been as high as 30.93 and as low as 7.55, with a median of 16.45, all within the past year.
These are only a few of the key metrics included in Ultra Clean's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, UCTT looks like an impressive value stock at the moment.
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Ultra Clean Holdings, Inc. (UCTT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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