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.
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 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 stock to keep an eye on is CooperStandard (CPS). CPS is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value. The stock holds a P/E ratio of 17.19, while its industry has an average P/E of 19.50. CPS's Forward P/E has been as high as 18.31 and as low as 16.39, with a median of 17.67, all within the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. CPS has a P/S ratio of 0.25. This compares to its industry's average P/S of 0.74.
Investors could also keep in mind LCI Industries (LCII), another Automotive - Original Equipment stock with a Zacks Rank of #2 (Buy) and Value grade of A.
Additionally, LCI Industries has a P/B ratio of 1.78 while its industry's price-to-book ratio sits at 3.39. For LCII, this valuation metric has been as high as 2.27, as low as 1.39, with a median of 1.86 over the past year.
These are only a few of the key metrics included in CooperStandard and LCI Industries strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, CPS and LCII look like an impressive value stock at the moment.
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Cooper-Standard Holdings Inc. (CPS): Free Stock Analysis Report LCI Industries (LCII): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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