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.
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 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 Host Hotels & Resorts (HST). HST is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 7.85. This compares to its industry's average Forward P/E of 15.32. Over the last 12 months, HST's Forward P/E has been as high as 9.77 and as low as 6.79, with a median of 8.51.
We also note that HST holds a PEG ratio of 1.65. 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. HST's industry has an average PEG of 2.01 right now. Over the past 52 weeks, HST's PEG has been as high as 1.67 and as low as 1.42, with a median of 1.57.
We should also highlight that HST has a P/B ratio of 1.59. The P/B is a method of comparing a stock's market value to 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 1.67. Within the past 52 weeks, HST's P/B has been as high as 1.99 and as low as 1.32, with a median of 1.73.
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. HST has a P/S ratio of 1.83. This compares to its industry's average P/S of 3.86.
Finally, our model also underscores that HST has a P/CF ratio of 7.30. 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. HST's current P/CF looks attractive when compared to its industry's average P/CF of 14.67. HST's P/CF has been as high as 9.04 and as low as 6.05, with a median of 7.87, all within the past year.
Another great REIT and Equity Trust - Other stock you could consider is Piedmont Realty Trust, Inc. (PDM), which is a Zacks Rank of #2 (Buy) stock with a Value Score of A.
Additionally, Piedmont Realty Trust, Inc. has a P/B ratio of 0.60 while its industry's price-to-book ratio sits at 1.67. For PDM, this valuation metric has been as high as 0.84, as low as 0.46, with a median of 0.64 over the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Host Hotels & Resorts and Piedmont Realty Trust, Inc. are likely undervalued currently. And when considering the strength of its earnings outlook, HST and PDM sticks out as one of the market's strongest value stocks.
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Host Hotels & Resorts, Inc. (HST): Free Stock Analysis Report Piedmont Realty Trust, Inc. (PDM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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