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.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 Nokia (NOK). NOK is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 13.90. This compares to its industry's average Forward P/E of 23.51. Over the past year, NOK's Forward P/E has been as high as 15.03 and as low as 8.67, with a median of 12.31.
NOK is also sporting a PEG ratio of 6.18. 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. NOK's industry has an average PEG of 8.29 right now. NOK's PEG has been as high as 6.68 and as low as 0.92, with a median of 5.47, 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. NOK has a P/S ratio of 1.32. This compares to its industry's average P/S of 1.94.
Finally, our model also underscores that NOK has a P/CF ratio of 11.27. 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. This stock's P/CF looks attractive against its industry's average P/CF of 40.41. Within the past 12 months, NOK's P/CF has been as high as 17.12 and as low as 8.75, with a median of 11.95.
Value investors will likely look at more than just these metrics, but the above data helps show that Nokia is likely undervalued currently. And when considering the strength of its earnings outlook, NOK sticks out at as one of the market's strongest value stocks.
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Nokia Corporation (NOK): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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