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 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 KT (KT). KT is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 8.32, which compares to its industry's average of 11.15. Over the last 12 months, KT's Forward P/E has been as high as 18.18 and as low as 6.09, with a median of 7.20.
Investors should also recognize that KT has a P/B ratio of 0.84. 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 1.19. KT's P/B has been as high as 0.86 and as low as 0.55, with a median of 0.70, over the past year.
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. KT has a P/S ratio of 0.56. This compares to its industry's average P/S of 1.28.
Finally, we should also recognize that KT has a P/CF ratio of 3.18. 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. This stock's P/CF looks attractive against its industry's average P/CF of 5.10. KT's P/CF has been as high as 3.27 and as low as 1.78, with a median of 2.61, all within the past year.
These are just a handful of the figures considered in KT'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 KT is an impressive value stock right now.
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KT Corporation (KT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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