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.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is VAREX IMAGING (VREX). VREX is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 12.05, while its industry has an average P/E of 21.47. Over the past 52 weeks, VREX's Forward P/E has been as high as 26.48 and as low as 11.49, with a median of 18.62.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. VREX has a P/S ratio of 0.57. This compares to its industry's average P/S of 1.5.
These are just a handful of the figures considered in VAREX IMAGING'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 VREX is an impressive value stock right now.
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VAREX IMAGING (VREX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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