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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 value investors might notice is Carnival (CCL). CCL is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 13.58, which compares to its industry's average of 17.38. CCL's Forward P/E has been as high as 20.07 and as low as 8.45, with a median of 13.45, all within the past year.
Investors will also notice that CCL has a PEG ratio of 0.61. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. CCL's industry currently sports an average PEG of 0.88. CCL's PEG has been as high as 0.86 and as low as 0.37, with a median of 0.60, all within the past year.
Another notable valuation metric for CCL is its P/B ratio of 3.56. The P/B ratio is used to compare a stock's market value with 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 4.65. Over the past 12 months, CCL's P/B has been as high as 3.79 and as low as 2.09, with a median of 3.05.
Finally, our model also underscores that CCL has a P/CF ratio of 8.05. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. CCL's current P/CF looks attractive when compared to its industry's average P/CF of 14.11. CCL's P/CF has been as high as 8.64 and as low as 4.49, with a median of 7.39, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Carnival is likely undervalued currently. And when considering the strength of its earnings outlook, CCL sticks out as one of the market's strongest value stocks.
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Carnival Corporation (CCL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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