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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 company to watch right now is Dana (DAN). DAN is currently sporting a Zacks Rank #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 11.5, which compares to its industry's average of 19.10. DAN's Forward P/E has been as high as 13.55 and as low as 5.44, with a median of 9.84, all within the past year.
Investors should also note that DAN holds a PEG ratio of 1.11. 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. DAN's PEG compares to its industry's average PEG of 1.20. DAN's PEG has been as high as 1.21 and as low as 0.31, with a median of 0.69, all within the past year.
Another notable valuation metric for DAN is its P/B ratio of 2.35. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. DAN's current P/B looks attractive when compared to its industry's average P/B of 3.25. Within the past 52 weeks, DAN's P/B has been as high as 2.44 and as low as 0.72, with a median of 1.48.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. DAN has a P/S ratio of 0.27. This compares to its industry's average P/S of 0.76.
Value investors will likely look at more than just these metrics, but the above data helps show that Dana is likely undervalued currently. And when considering the strength of its earnings outlook, DAN 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
Dana Incorporated (DAN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
