The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
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 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 value investors might notice is Edison International (EIX). EIX is currently sporting a Zacks Rank #1 (Strong Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 9.09 right now. For comparison, its industry sports an average P/E of 15.32. Over the past year, EIX's Forward P/E has been as high as 16.17 and as low as 7.94, with a median of 9.49.
Investors should also recognize that EIX has a P/B ratio of 1.24. 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 company's current P/B looks solid when compared to its industry's average P/B of 2.53. Within the past 52 weeks, EIX's P/B has been as high as 2.08 and as low as 1.08, with a median of 1.30.
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. EIX has a P/S ratio of 1.3. This compares to its industry's average P/S of 2.58.
If you're looking for another solid Utility - Electric Power value stock, take a look at ENGIE - Sponsored ADR (ENGIY). ENGIY is a Zacks Rank of #2 (Buy) stock with a Value score of A.
Furthermore, ENGIE - Sponsored ADR holds a P/B ratio of 1.14 and its industry's price-to-book ratio is 2.53. ENGIY's P/B has been as high as 1.28, as low as 0.86, with a median of 1.05 over the past 12 months.
These are just a handful of the figures considered in Edison International and ENGIE - Sponsored ADR's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that EIX and ENGIY is an impressive value stock right now.
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Edison International (EIX): Free Stock Analysis Report ENGIE - Sponsored ADR (ENGIY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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