The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 company value investors might notice is Reynolds Consumer Products (REYN). REYN is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 14.15. This compares to its industry's average Forward P/E of 15.19. Over the past year, REYN's Forward P/E has been as high as 18.25 and as low as 13.14, with a median of 14.50.
We should also highlight that REYN has a P/B ratio of 2.23. Investors use the P/B ratio to look at a stock's market value versus 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 2.60. Over the past 12 months, REYN's P/B has been as high as 3.31 and as low as 2.09, with a median of 2.34.
Finally, we should also recognize that REYN has a P/CF ratio of 10.87. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 30.67. Over the past year, REYN's P/CF has been as high as 13.89 and as low as 9.57, with a median of 10.88.
Value investors will likely look at more than just these metrics, but the above data helps show that Reynolds Consumer Products is likely undervalued currently. And when considering the strength of its earnings outlook, REYN sticks out as one of the market's strongest value stocks.
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Reynolds Consumer Products Inc. (REYN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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