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.
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 stock to keep an eye on is CNA Financial (CNA). CNA is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 10.34, while its industry has an average P/E of 26.83. Over the past 52 weeks, CNA's Forward P/E has been as high as 11.18 and as low as 9.52, with a median of 10.26.
We should also highlight that CNA has a P/B ratio of 1.21. 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 stock's P/B looks attractive against its industry's average P/B of 1.50. Over the past 12 months, CNA's P/B has been as high as 1.42 and as low as 1.10, with a median of 1.25.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CNA has a P/S ratio of 0.87. This compares to its industry's average P/S of 1.27.
These are just a handful of the figures considered in CNA Financial's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that CNA is an impressive value stock right now.
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CNA Financial Corporation (CNA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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