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, 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 stock to keep an eye on is Centerra Gold (CGAU). CGAU is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 9.53, which compares to its industry's average of 13.72. CGAU's Forward P/E has been as high as 12.58 and as low as 6.58, with a median of 9.65, all within the past year.
Investors should also recognize that CGAU has a P/B ratio of 1.14. 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 company's current P/B looks solid when compared to its industry's average P/B of 3.09. Over the past year, CGAU's P/B has been as high as 1.14 and as low as 0.67, with a median of 0.84.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CGAU has a P/S ratio of 2.72. This compares to its industry's average P/S of 6.04.
Finally, investors should note that CGAU has a P/CF ratio of 10.35. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. CGAU's P/CF compares to its industry's average P/CF of 14.82. Within the past 12 months, CGAU's P/CF has been as high as 10.35 and as low as 4.87, with a median of 6.62.
These are only a few of the key metrics included in Centerra Gold'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, CGAU looks like an impressive value stock at the moment.
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Centerra Gold Inc. (CGAU): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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