The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 company to watch right now is Koninklijke Philips (PHG). PHG is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 17.12 right now. For comparison, its industry sports an average P/E of 20.94. Over the past year, PHG's Forward P/E has been as high as 18.69 and as low as 13.05, with a median of 15.63.
PHG is also sporting a PEG ratio of 0.71. 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. PHG's industry has an average PEG of 1.98 right now. Over the past 52 weeks, PHG's PEG has been as high as 0.97 and as low as 0.45, with a median of 0.70.
We should also highlight that PHG has a P/B ratio of 2.29. 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 solid versus its industry's average P/B of 5.01. Over the past year, PHG's P/B has been as high as 2.40 and as low as 1.65, with a median of 1.93.
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. PHG has a P/S ratio of 1.41. This compares to its industry's average P/S of 1.58.
These are only a few of the key metrics included in Koninklijke Philips'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, PHG looks like an impressive value stock at the moment.
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Koninklijke Philips N.V. (PHG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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