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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 stock to keep an eye on is Piedmont Realty Trust, Inc. (PDM). PDM 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 6.37 right now. For comparison, its industry sports an average P/E of 15.56. Over the last 12 months, PDM's Forward P/E has been as high as 7.42 and as low as 4.06, with a median of 5.54.
Investors should also recognize that PDM has a P/B ratio of 0.72. 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. PDM's current P/B looks attractive when compared to its industry's average P/B of 1.80. Over the past 12 months, PDM's P/B has been as high as 0.84 and as low as 0.46, with a median of 0.63.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. PDM has a P/S ratio of 1.97. This compares to its industry's average P/S of 3.9.
Finally, we should also recognize that PDM has a P/CF ratio of 7.02. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 15.13. Within the past 12 months, PDM's P/CF has been as high as 8.83 and as low as 4.29, with a median of 6.18.
Value investors will likely look at more than just these metrics, but the above data helps show that Piedmont Realty Trust, Inc. is likely undervalued currently. And when considering the strength of its earnings outlook, PDM 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
Piedmont Realty Trust, Inc. (PDM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
