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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
BJ's Restaurants (BJRI) is a stock many investors are watching right now. BJRI is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 13.5 right now. For comparison, its industry sports an average P/E of 24.22. BJRI's Forward P/E has been as high as 28.43 and as low as 13.50, with a median of 22.34, all within the past year.
Investors should also note that BJRI holds a PEG ratio of 0.96. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. BJRI's industry has an average PEG of 1.88 right now. Within the past year, BJRI's PEG has been as high as 2.03 and as low as 0.96, with a median of 1.60.
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 preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. BJRI has a P/S ratio of 0.68. This compares to its industry's average P/S of 0.8.
Value investors will likely look at more than just these metrics, but the above data helps show that BJ's Restaurants is likely undervalued currently. And when considering the strength of its earnings outlook, BJRI sticks out as one of the market's strongest value stocks.
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BJ's Restaurants, Inc. (BJRI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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