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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 stock to keep an eye on is Huntington Ingalls Industries (HII). HII is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 17.86, while its industry has an average P/E of 27.64. Over the last 12 months, HII's Forward P/E has been as high as 17.86 and as low as 10.03, with a median of 14.20.
Investors should also note that HII holds a PEG ratio of 1.58. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. HII's industry currently sports an average PEG of 2.02. HII's PEG has been as high as 2.25 and as low as 1.02, with a median of 1.56, all within the past year.
Investors should also recognize that HII has a P/B ratio of 2.29. 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 stock's P/B looks solid versus its industry's average P/B of 6.17. Within the past 52 weeks, HII's P/B has been as high as 2.65 and as low as 1.34, with a median of 1.86.
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. HII has a P/S ratio of 0.92. This compares to its industry's average P/S of 2.23.
These are only a few of the key metrics included in Huntington Ingalls Industries'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, HII looks like an impressive value stock at the moment.
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Huntington Ingalls Industries, Inc. (HII): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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