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.
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.
One stock to keep an eye on is Popular (BPOP). BPOP is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 10.36. This compares to its industry's average Forward P/E of 10.83. Over the past 52 weeks, BPOP's Forward P/E has been as high as 11.26 and as low as 7.81, with a median of 9.44.
Investors will also notice that BPOP has a PEG ratio of 0.61. 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. BPOP's industry has an average PEG of 0.63 right now. Within the past year, BPOP's PEG has been as high as 0.92 and as low as 0.50, with a median of 0.60.
We should also highlight that BPOP has a P/B ratio of 1.48. 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 solid versus its industry's average P/B of 1.87. Over the past 12 months, BPOP's P/B has been as high as 1.48 and as low as 0.98, with a median of 1.25.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by 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. BPOP has a P/S ratio of 2.12. This compares to its industry's average P/S of 2.35.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Popular is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BPOP feels like a great value stock at the moment.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Popular, Inc. (BPOP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
