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.
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.
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 company to watch right now is Apple Hospitality REIT (APLE). APLE is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 8.39 right now. For comparison, its industry sports an average P/E of 15.48. Over the last 12 months, APLE's Forward P/E has been as high as 9.93 and as low as 6.69, with a median of 8.64.
Investors should also recognize that APLE has a P/B ratio of 0.93. The P/B ratio is used to compare a stock's market value with 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 1.86. Within the past 52 weeks, APLE's P/B has been as high as 1.19 and as low as 0.79, with a median of 0.98.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. APLE has a P/S ratio of 2.02. This compares to its industry's average P/S of 3.84.
Finally, we should also recognize that APLE has a P/CF ratio of 7.96. 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. APLE's current P/CF looks attractive when compared to its industry's average P/CF of 15.80. Over the past year, APLE's P/CF has been as high as 9.97 and as low as 6.68, with a median of 8.20.
These are only a few of the key metrics included in Apple Hospitality REIT's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, APLE looks like an impressive value stock at the moment.
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Apple Hospitality REIT, Inc. (APLE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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