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.
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 Vontier (VNT). VNT is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 12.63, while its industry has an average P/E of 21.55. Over the last 12 months, VNT's Forward P/E has been as high as 12.96 and as low as 8.65, with a median of 11.59.
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 preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. VNT has a P/S ratio of 1.89. This compares to its industry's average P/S of 1.99.
Finally, our model also underscores that VNT has a P/CF ratio of 12.23. 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. VNT's P/CF compares to its industry's average P/CF of 22.11. Within the past 12 months, VNT's P/CF has been as high as 12.36 and as low as 8.36, with a median of 10.65.
These are only a few of the key metrics included in Vontier's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, VNT looks like an impressive value stock at the moment.
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Vontier Corporation (VNT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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