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.
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.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company to watch right now is Strattec Security (STRT). STRT is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 16.18. This compares to its industry's average Forward P/E of 17.29. Over the last 12 months, STRT's Forward P/E has been as high as 20.21 and as low as 8.54, with a median of 13.89.
We should also highlight that STRT has a P/B ratio of 1.19. 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 attractive against its industry's average P/B of 3.13. STRT's P/B has been as high as 1.38 and as low as 0.58, with a median of 0.77, over the past year.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. STRT has a P/S ratio of 0.57. This compares to its industry's average P/S of 0.73.
Finally, investors should note that STRT has a P/CF ratio of 8.65. 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. STRT's P/CF compares to its industry's average P/CF of 25.70. Over the past 52 weeks, STRT's P/CF has been as high as 10.03 and as low as 3.82, with a median of 5.45.
Value investors will likely look at more than just these metrics, but the above data helps show that Strattec Security is likely undervalued currently. And when considering the strength of its earnings outlook, STRT sticks out as one of the market's strongest value stocks.
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Strattec Security Corporation (STRT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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