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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One stock to keep an eye on is Visteon (VC). VC is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 13.69, which compares to its industry's average of 19.65. Over the last 12 months, VC's Forward P/E has been as high as 14.33 and as low as 8.02, with a median of 10.34.
Another notable valuation metric for VC is its P/B ratio of 2.27. The P/B ratio pits a stock's market value against 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 3.39. Over the past 12 months, VC's P/B has been as high as 2.34 and as low as 1.31, with a median of 1.87.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. VC has a P/S ratio of 0.78. This compares to its industry's average P/S of 0.79.
Value investors will likely look at more than just these metrics, but the above data helps show that Visteon is likely undervalued currently. And when considering the strength of its earnings outlook, VC sticks out as one of the market's strongest value stocks.
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Visteon Corporation (VC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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