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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.
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.
Rockwell Medical (RMTI) is a stock many investors are watching right now. RMTI is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A.
We should also highlight that RMTI has a P/B ratio of 1.49. The P/B is a method of comparing a stock's market value to 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 2.82. Over the past 12 months, RMTI's P/B has been as high as 5.68 and as low as 0.86, with a median of 1.72.
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. RMTI has a P/S ratio of 0.53. This compares to its industry's average P/S of 1.5.
Investors could also keep in mind VAREX IMAGING (VREX), another Medical - Products stock with a Zacks Rank of #2 (Buy) and Value grade of A.
VAREX IMAGING is currently trading with a Forward P/E ratio of 12.78 while its PEG ratio sits at 2.47. Both of the company's metrics compare favorably to its industry's average P/E of 19.47 and average PEG ratio of 1.50.
VAREX IMAGING also has a P/B ratio of 1.08 compared to its industry's price-to-book ratio of 2.82. Over the past year, its P/B ratio has been as high as 1.24, as low as 0.50, with a median of 0.94.
These are only a few of the key metrics included in Rockwell Medical and VAREX IMAGING strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, RMTI and VREX look like an impressive value stock at the moment.
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Rockwell Medical, Inc. (RMTI): Free Stock Analysis Report VAREX IMAGING (VREX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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