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.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company value investors might notice is Zions Bancorporation (ZION). ZION is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value.
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. ZION has a P/S ratio of 1.59. This compares to its industry's average P/S of 2.42.
Finally, investors should note that ZION has a P/CF ratio of 8.97. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. ZION's P/CF compares to its industry's average P/CF of 10.29. Within the past 12 months, ZION's P/CF has been as high as 11.06 and as low as 6.62, with a median of 8.64.
Value investors will likely look at more than just these metrics, but the above data helps show that Zions Bancorporation is likely undervalued currently. And when considering the strength of its earnings outlook, ZION sticks out as one of the market's strongest value stocks.
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Zions Bancorporation, N.A. (ZION): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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