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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 stock to keep an eye on is Flex (FLEX). FLEX is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 18.74, while its industry has an average P/E of 23.62. Over the last 12 months, FLEX's Forward P/E has been as high as 18.74 and as low as 9.39, with a median of 14.55.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by 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. FLEX has a P/S ratio of 0.82. This compares to its industry's average P/S of 2.02.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Flex is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, FLEX feels like a great value stock at the moment.
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Flex Ltd. (FLEX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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