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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 stock to keep an eye on is Popular (BPOP). BPOP is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 10.36. This compares to its industry's average Forward P/E of 10.51. Over the past year, BPOP's Forward P/E has been as high as 11.26 and as low as 7.81, with a median of 9.44.
We also note that BPOP holds a PEG ratio of 0.61. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. BPOP's industry has an average PEG of 0.63 right now. BPOP's PEG has been as high as 0.92 and as low as 0.50, with a median of 0.60, all within the past year.
We should also highlight that BPOP has a P/B ratio of 1.48. 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 1.79. Within the past 52 weeks, BPOP's P/B has been as high as 1.48 and as low as 0.98, with a median of 1.25.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. BPOP has a P/S ratio of 1.97. This compares to its industry's average P/S of 2.27.
Finally, we should also recognize that BPOP has a P/CF ratio of 16.96. 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. BPOP's current P/CF looks attractive when compared to its industry's average P/CF of 17.64. Within the past 12 months, BPOP's P/CF has been as high as 19.54 and as low as 11.90, with a median of 16.06.
Value investors will likely look at more than just these metrics, but the above data helps show that Popular is likely undervalued currently. And when considering the strength of its earnings outlook, BPOP sticks out as one of the market's strongest value stocks.
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Popular, Inc. (BPOP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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