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.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One stock to keep an eye on is Melco Resorts & Entertainment Limited (MLCO). MLCO is currently holding a Zacks Rank #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 14.24, which compares to its industry's average of 28.86. Over the past year, MLCO's Forward P/E has been as high as 38.28 and as low as 13.21, with a median of 18.39.
Investors should also note that MLCO holds a PEG ratio of 0.53. 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. MLCO's industry currently sports an average PEG of 1.26. Over the past 52 weeks, MLCO's PEG has been as high as 1.11 and as low as 0.38, with a median of 0.49.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. MLCO has a P/S ratio of 0.66. This compares to its industry's average P/S of 1.4.
These are just a handful of the figures considered in Melco Resorts & Entertainment Limited'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 MLCO is an impressive value stock right now.
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Melco Resorts & Entertainment Limited (MLCO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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