While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company value investors might notice is CNO Financial Group (CNO). CNO is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value.
Another valuation metric that we should highlight is CNO's P/B ratio of 1.52. 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 company's current P/B looks solid when compared to its industry's average P/B of 2.21. CNO's P/B has been as high as 1.75 and as low as 1.31, with a median of 1.50, over 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. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CNO has a P/S ratio of 0.88. This compares to its industry's average P/S of 1.13.
Scor (SCRYY) may be another strong Insurance - Multi line stock to add to your shortlist. SCRYY is a Zacks Rank of #2 (Buy) stock with a Value grade of A.
Additionally, Scor has a P/B ratio of 1.25 while its industry's price-to-book ratio sits at 2.21. For SCRYY, this valuation metric has been as high as 1.32, as low as 0.76, with a median of 1.01 over the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that CNO Financial Group and Scor are likely undervalued currently. And when considering the strength of its earnings outlook, CNO and SCRYY sticks out as one of the market's strongest value stocks.
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CNO Financial Group, Inc. (CNO): Free Stock Analysis Report Scor SE (SCRYY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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