Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 The Andersons (ANDE). ANDE is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A.
We should also highlight that ANDE has a P/B ratio of 0.81. 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 0.88. Over the past 12 months, ANDE's P/B has been as high as 1.39 and as low as 0.78, with a median of 1.07.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. ANDE has a P/S ratio of 0.12. This compares to its industry's average P/S of 0.2.
Finally, we should also recognize that ANDE has a P/CF ratio of 5.43. 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. ANDE's current P/CF looks attractive when compared to its industry's average P/CF of 5.81. Over the past year, ANDE's P/CF has been as high as 8.59 and as low as 5.20, with a median of 6.88.
These are just a handful of the figures considered in The Andersons'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 ANDE is an impressive value stock right now.
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The Andersons, Inc. (ANDE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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