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.
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.
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 Science Applications International (SAIC). SAIC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 11.62, which compares to its industry's average of 25.53. SAIC's Forward P/E has been as high as 17.39 and as low as 10.50, with a median of 14, all within the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. SAIC has a P/S ratio of 0.72. This compares to its industry's average P/S of 1.92.
Value investors will likely look at more than just these metrics, but the above data helps show that Science Applications International is likely undervalued currently. And when considering the strength of its earnings outlook, SAIC sticks out at as one of the market's strongest value stocks.
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Science Applications International Corporation (SAIC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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