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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.
Invesco Mortgage Capital (IVR) is a stock many investors are watching right now. IVR is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 3.79, which compares to its industry's average of 8.35. Over the past 52 weeks, IVR's Forward P/E has been as high as 4.12 and as low as 2.63, with a median of 3.41.
Another valuation metric that we should highlight is IVR's P/B ratio of 0.92. 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. IVR's current P/B looks attractive when compared to its industry's average P/B of 1.02. Over the past 12 months, IVR's P/B has been as high as 0.99 and as low as 0.70, with a median of 0.88.
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. IVR has a P/S ratio of 1.71. This compares to its industry's average P/S of 2.2.
Finally, our model also underscores that IVR has a P/CF ratio of 16.03. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. IVR's P/CF compares to its industry's average P/CF of 18.17. Over the past 52 weeks, IVR's P/CF has been as high as 17.16 and as low as -8.89, with a median of 11.11.
These are just a handful of the figures considered in Invesco Mortgage Capital'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 IVR is an impressive value stock right now.
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INVESCO MORTGAGE CAPITAL INC (IVR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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