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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
Huntington Ingalls Industries (HII) is a stock many investors are watching right now. HII is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 16.92, which compares to its industry's average of 32.94. Over the past year, HII's Forward P/E has been as high as 17.86 and as low as 10.03, with a median of 14.23.
HII is also sporting a PEG ratio of 1.43. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. HII's industry has an average PEG of 2.03 right now. Within the past year, HII's PEG has been as high as 2.13 and as low as 1.02, with a median of 1.46.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. HII has a P/S ratio of 1.25. This compares to its industry's average P/S of 2.99.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Huntington Ingalls Industries is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, HII feels like a great value stock at the moment.
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Huntington Ingalls Industries, Inc. (HII): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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