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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 company to watch right now is Assurant (AIZ). AIZ is currently sporting a Zacks Rank #2 (Buy) and an A for Value.
Another notable valuation metric for AIZ is its P/B ratio of 1.94. 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 attractive against its industry's average P/B of 2.41. Over the past 12 months, AIZ's P/B has been as high as 2.25 and as low as 1.71, with a median of 1.98.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. AIZ has a P/S ratio of 0.89. This compares to its industry's average P/S of 1.13.
Value investors will likely look at more than just these metrics, but the above data helps show that Assurant is likely undervalued currently. And when considering the strength of its earnings outlook, AIZ sticks out as one of the market's strongest value stocks.
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Assurant, Inc. (AIZ): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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