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.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 LCI Industries (LCII). LCII is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 14.19, which compares to its industry's average of 18.01. LCII's Forward P/E has been as high as 19.04 and as low as 10.65, with a median of 14.77, all within the past year.
Another valuation metric that we should highlight is LCII's P/B ratio of 1.78. The P/B ratio is used to compare a stock's market value with 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 3.01. LCII's P/B has been as high as 2.27 and as low as 1.39, with a median of 1.86, over 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. LCII has a P/S ratio of 0.65. This compares to its industry's average P/S of 0.74.
Value investors will likely look at more than just these metrics, but the above data helps show that LCI Industries is likely undervalued currently. And when considering the strength of its earnings outlook, LCII sticks out as one of the market's strongest value stocks.
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LCI Industries (LCII): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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