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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 GARRETT MOTION (GTX). GTX is currently sporting a Zacks Rank #1 (Strong Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 9.45. This compares to its industry's average Forward P/E of 19.53. Over the past year, GTX's Forward P/E has been as high as 9.56 and as low as 5.83, with a median of 7.57.
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. GTX has a P/S ratio of 0.73. This compares to its industry's average P/S of 0.75.
These figures are just a handful of the metrics value investors tend to look at, but they help show that GARRETT MOTION is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, GTX feels like a great value stock at the moment.
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Garrett Motion Inc. (GTX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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