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.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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.
New Oriental Education & Technology Group (EDU) is a stock many investors are watching right now. EDU is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value.
Another valuation metric that we should highlight is EDU's P/B ratio of 2.23. 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 solid versus its industry's average P/B of 3.58. Over the past year, EDU's P/B has been as high as 3.23 and as low as 1.76, with a median of 2.15.
Finally, investors will want to recognize that EDU has a P/CF ratio of 17.37. 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 stock's P/CF looks attractive against its industry's average P/CF of 29.68. EDU's P/CF has been as high as 26.93 and as low as 13.44, with a median of 16.54, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that New Oriental Education & Technology Group is likely undervalued currently. And when considering the strength of its earnings outlook, EDU sticks out as one of the market's strongest value stocks.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
New Oriental Education & Technology Group, Inc. (EDU): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
