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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
One stock to keep an eye on is CNA Financial (CNA). CNA is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 9.7 right now. For comparison, its industry sports an average P/E of 27.69. Over the past year, CNA's Forward P/E has been as high as 11.18 and as low as 9.52, with a median of 10.26.
We also note that CNA holds a PEG ratio of 3.90. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CNA's PEG compares to its industry's average PEG of 4.24. Over the last 12 months, CNA's PEG has been as high as 9.20 and as low as 3.19, with a median of 5.60.
We should also highlight that CNA has a P/B ratio of 1.16. 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 1.54. Over the past year, CNA's P/B has been as high as 1.38 and as low as 1.10, with a median of 1.24.
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. CNA has a P/S ratio of 0.84. This compares to its industry's average P/S of 1.3.
These are only a few of the key metrics included in CNA Financial'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, CNA looks like an impressive value stock at the moment.
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CNA Financial Corporation (CNA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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