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.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 stock to keep an eye on is Gibraltar Industries (ROCK). ROCK is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 13.68 right now. For comparison, its industry sports an average P/E of 19.19. Over the past year, ROCK's Forward P/E has been as high as 15.52 and as low as 9.82, with a median of 12.52.
We also note that ROCK holds a PEG ratio of 0.91. 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. ROCK's PEG compares to its industry's average PEG of 2.04. ROCK's PEG has been as high as 0.97 and as low as 0.77, with a median of 0.90, all within the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. ROCK has a P/S ratio of 1.24. This compares to its industry's average P/S of 1.39.
Finally, our model also underscores that ROCK has a P/CF ratio of 11.72. 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 stock's P/CF looks attractive against its industry's average P/CF of 17.57. Over the past year, ROCK's P/CF has been as high as 16.53 and as low as 9.37, with a median of 11.78.
Value investors will likely look at more than just these metrics, but the above data helps show that Gibraltar Industries is likely undervalued currently. And when considering the strength of its earnings outlook, ROCK sticks out as one of the market's strongest value stocks.
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Gibraltar Industries, Inc. (ROCK): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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