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.
AZZ (AZZ) is a stock many investors are watching right now. AZZ is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 18.63, which compares to its industry's average of 22.25. Over the past year, AZZ's Forward P/E has been as high as 18.66 and as low as 12.87, with a median of 15.35.
Investors should also note that AZZ holds a PEG ratio of 1.03. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. AZZ's industry currently sports an average PEG of 2.15. AZZ's PEG has been as high as 1.27 and as low as 0.92, with a median of 1.07, all within the past year.
Investors should also recognize that AZZ has a P/B ratio of 2.89. 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 attractive against its industry's average P/B of 4.76. Within the past 52 weeks, AZZ's P/B has been as high as 2.89 and as low as 2.16, with a median of 2.50.
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. AZZ has a P/S ratio of 2.19. This compares to its industry's average P/S of 2.44.
Finally, investors should note that AZZ has a P/CF ratio of 9.91. 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. AZZ's current P/CF looks attractive when compared to its industry's average P/CF of 20.99. Over the past 52 weeks, AZZ's P/CF has been as high as 13.51 and as low as 7.42, with a median of 11.34.
Value investors will likely look at more than just these metrics, but the above data helps show that AZZ is likely undervalued currently. And when considering the strength of its earnings outlook, AZZ sticks out as one of the market's strongest value stocks.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
AZZ Inc. (AZZ): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
