Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
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 VALE (VALE). VALE is currently sporting a Zacks Rank #1 (Strong Buy) and an A for Value. The stock holds a P/E ratio of 6.26, while its industry has an average P/E of 6.96. Over the past year, VALE's Forward P/E has been as high as 6.26 and as low as 4.05, with a median of 5.17.
We also note that VALE holds a PEG ratio of 0.29. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. VALE's industry has an average PEG of 0.46 right now. VALE's PEG has been as high as 4.05 and as low as 0.23, with a median of 0.29, all within the past year.
Investors should also recognize that VALE has a P/B ratio of 1.22. The P/B ratio pits a stock's market value against 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 1.52. Over the past 12 months, VALE's P/B has been as high as 1.40 and as low as 1.00, with a median of 1.17.
Finally, our model also underscores that VALE has a P/CF ratio of 5.61. 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 7.07. Within the past 12 months, VALE's P/CF has been as high as 5.64 and as low as 3.01, with a median of 4.42.
Value investors will likely look at more than just these metrics, but the above data helps show that VALE is likely undervalued currently. And when considering the strength of its earnings outlook, VALE sticks out as one of the market's strongest value stocks.
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VALE S.A. (VALE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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