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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 stock to keep an eye on is Crocs (CROX). CROX is currently sporting a Zacks Rank #1 (Strong Buy) and an A for Value. The stock holds a P/E ratio of 6.89, while its industry has an average P/E of 16.48. Over the past year, CROX's Forward P/E has been as high as 10.77 and as low as 5.62, with a median of 7.89.
Investors should also recognize that CROX has a P/B ratio of 3.17. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 7.33. Within the past 52 weeks, CROX's P/B has been as high as 5.29 and as low as 2.52, with a median of 3.37.
Finally, investors should note that CROX has a P/CF ratio of 14.42. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 22.39. Over the past year, CROX's P/CF has been as high as 19.53 and as low as 4.86, with a median of 6.52.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Crocs is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CROX feels like a great value stock at the moment.
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Crocs, Inc. (CROX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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