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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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 POSCO (PKX). PKX is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 10.58 right now. For comparison, its industry sports an average P/E of 10.95. PKX's Forward P/E has been as high as 14.79 and as low as 7.01, with a median of 10.67, all within the past year.
Investors will also notice that PKX has a PEG ratio of 0.29. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. PKX's industry has an average PEG of 0.38 right now. PKX's PEG has been as high as 2.55 and as low as 0.27, with a median of 0.37, all within the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. PKX has a P/S ratio of 0.3. This compares to its industry's average P/S of 0.33.
These are only a few of the key metrics included in POSCO'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, PKX looks like an impressive value stock at the moment.
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POSCO (PKX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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