Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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.
Carnival (CCL) is a stock many investors are watching right now. CCL is currently sporting a Zacks Rank #1 (Strong Buy) and an A for Value. The stock has a Forward P/E ratio of 13.8. This compares to its industry's average Forward P/E of 19.51. CCL's Forward P/E has been as high as 20.07 and as low as 8.45, with a median of 12.69, all within the past year.
We also note that CCL holds a PEG ratio of 0.62. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. CCL's PEG compares to its industry's average PEG of 1.00. Over the last 12 months, CCL's PEG has been as high as 0.86 and as low as 0.37, with a median of 0.57.
Investors should also recognize that CCL has a P/B ratio of 3.52. 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 company's current P/B looks solid when compared to its industry's average P/B of 5.14. CCL's P/B has been as high as 3.59 and as low as 2.09, with a median of 2.87, over the past year.
Finally, investors will want to recognize that CCL has a P/CF ratio of 7.95. 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. CCL's P/CF compares to its industry's average P/CF of 15.53. Over the past year, CCL's P/CF has been as high as 8.64 and as low as 4.49, with a median of 6.46.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Carnival is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CCL feels like a great value stock at the moment.
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Carnival Corporation (CCL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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