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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is Jabil (JBL). JBL is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 20.28 right now. For comparison, its industry sports an average P/E of 24.68. Over the last 12 months, JBL's Forward P/E has been as high as 22.12 and as low as 11.87, with a median of 16.48.
Investors should also note that JBL holds a PEG ratio of 1.22. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. JBL's industry has an average PEG of 1.40 right now. Over the last 12 months, JBL's PEG has been as high as 2.17 and as low as 0.95, with a median of 1.31.
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. JBL has a P/S ratio of 0.76. This compares to its industry's average P/S of 0.99.
Finally, investors will want to recognize that JBL has a P/CF ratio of 18.33. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. JBL's current P/CF looks attractive when compared to its industry's average P/CF of 23.87. Over the past year, JBL's P/CF has been as high as 18.82 and as low as 6.04, with a median of 12.53.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Jabil is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, JBL feels like a great value stock at the moment.
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Jabil, Inc. (JBL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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