While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 CNO Financial Group (CNO). CNO is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value.
Another valuation metric that we should highlight is CNO's P/B ratio of 1.52. 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 attractive against its industry's average P/B of 2.66. Within the past 52 weeks, CNO's P/B has been as high as 1.75 and as low as 1.31, with a median of 1.50.
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. CNO has a P/S ratio of 0.91. This compares to its industry's average P/S of 1.09.
These figures are just a handful of the metrics value investors tend to look at, but they help show that CNO Financial Group is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CNO feels like a great value stock at the moment.
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CNO Financial Group, Inc. (CNO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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