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.
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 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 value investors might notice is Carnival (CCL). CCL is currently sporting a Zacks Rank #1 (Strong Buy) and an A for Value. The stock holds a P/E ratio of 13.58, while its industry has an average P/E of 17.51. CCL's Forward P/E has been as high as 20.07 and as low as 8.45, with a median of 13.45, all within the past year.
CCL is also sporting a PEG ratio of 0.61. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. CCL's PEG compares to its industry's average PEG of 1.15. Within the past year, CCL's PEG has been as high as 0.86 and as low as 0.37, with a median of 0.60.
Another notable valuation metric for CCL is its P/B ratio of 3.56. The P/B ratio pits a stock's market value against 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 4.26. CCL's P/B has been as high as 3.79 and as low as 2.09, with a median of 3.05, over the past year.
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. CCL has a P/S ratio of 1.58. This compares to its industry's average P/S of 1.59.
Finally, investors will want to recognize that CCL has a P/CF ratio of 8.05. 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. This stock's P/CF looks attractive against its industry's average P/CF of 13.54. Within the past 12 months, CCL's P/CF has been as high as 8.64 and as low as 4.49, with a median of 7.39.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Carnival is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CCL feels like a great value stock at the moment.
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Carnival Corporation (CCL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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