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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 to watch right now is Align Technology (ALGN). ALGN is currently holding a Zacks Rank #2 (Buy) and a Value grade of A.
We also note that ALGN holds a PEG ratio of 1.67. 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. ALGN's PEG compares to its industry's average PEG of 1.73. Within the past year, ALGN's PEG has been as high as 4.61 and as low as 1.32, with a median of 3.67.
We should also highlight that ALGN has a P/B ratio of 3.89. Investors use the P/B ratio to look at a stock's market value versus 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 4.60. Within the past 52 weeks, ALGN's P/B has been as high as 5.11 and as low as 2.78, with a median of 4.02.
Value investors will likely look at more than just these metrics, but the above data helps show that Align Technology is likely undervalued currently. And when considering the strength of its earnings outlook, ALGN sticks out as one of the market's strongest value stocks.
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Align Technology, Inc. (ALGN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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