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.
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.
One company value investors might notice is Kingstone Companies (KINS). KINS is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. KINS has a P/S ratio of 1.22. This compares to its industry's average P/S of 1.27.
Finally, investors will want to recognize that KINS has a P/CF ratio of 9.31. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. KINS's current P/CF looks attractive when compared to its industry's average P/CF of 10.50. Over the past year, KINS's P/CF has been as high as 16.42 and as low as 5.82, with a median of 9.92.
These are only a few of the key metrics included in Kingstone Companies'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, KINS looks like an impressive value stock at the moment.
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Kingstone Companies, Inc (KINS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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