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.
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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is United Fire Group (UFCS). UFCS is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 10.16, which compares to its industry's average of 26.97. UFCS's Forward P/E has been as high as 20.43 and as low as 9.98, with a median of 11.30, all within the past year.
We should also highlight that UFCS has a P/B ratio of 0.94. 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 1.47. UFCS's P/B has been as high as 1.02 and as low as 0.62, with a median of 0.87, over the past year.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. UFCS has a P/S ratio of 0.73. This compares to its industry's average P/S of 1.3.
Finally, our model also underscores that UFCS has a P/CF ratio of 7.83. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 12.35. Over the past 52 weeks, UFCS's P/CF has been as high as 13.42 and as low as 6.53, with a median of 9.51.
Value investors will likely look at more than just these metrics, but the above data helps show that United Fire Group is likely undervalued currently. And when considering the strength of its earnings outlook, UFCS sticks out as one of the market's strongest value stocks.
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United Fire Group, Inc (UFCS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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