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.
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.
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.
Academy Sports and Outdoors (ASO) is a stock many investors are watching right now. ASO is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 7.84, which compares to its industry's average of 23.03. Over the last 12 months, ASO's Forward P/E has been as high as 9.30 and as low as 5.45, with a median of 7.77.
Another notable valuation metric for ASO is its P/B ratio of 1.54. 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 solid versus its industry's average P/B of 3.96. Over the past year, ASO's P/B has been as high as 2.32 and as low as 1.18, with a median of 1.73.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. ASO has a P/S ratio of 0.53. This compares to its industry's average P/S of 1.14.
Value investors will likely look at more than just these metrics, but the above data helps show that Academy Sports and Outdoors is likely undervalued currently. And when considering the strength of its earnings outlook, ASO sticks out as one of the market's strongest value stocks.
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Academy Sports and Outdoors, Inc. (ASO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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