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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company value investors might notice is Nutrien (NTR). NTR is currently sporting a Zacks Rank #1 (Strong Buy) and an A for Value. The stock holds a P/E ratio of 13.27, while its industry has an average P/E of 13.42. Over the past year, NTR's Forward P/E has been as high as 15.98 and as low as 11.54, with a median of 13.46.
We also note that NTR holds a PEG ratio of 0.92. 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. NTR's industry currently sports an average PEG of 1.17. Within the past year, NTR's PEG has been as high as 1.67 and as low as 0.86, with a median of 1.09.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. NTR has a P/S ratio of 1.06. This compares to its industry's average P/S of 1.2.
Finally, investors should note that NTR has a P/CF ratio of 7.46. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. NTR's P/CF compares to its industry's average P/CF of 13.47. NTR's P/CF has been as high as 10.72 and as low as 7.14, with a median of 7.95, all within the past year.
These are only a few of the key metrics included in Nutrien'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, NTR looks like an impressive value stock at the moment.
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Nutrien Ltd. (NTR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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