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.
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.
One stock to keep an eye on is BJ's Restaurants (BJRI). BJRI is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 13.5, which compares to its industry's average of 25.11. Over the past year, BJRI's Forward P/E has been as high as 28.43 and as low as 13.50, with a median of 22.34.
BJRI is also sporting a PEG ratio of 0.96. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. BJRI's industry has an average PEG of 1.81 right now. Over the past 52 weeks, BJRI's PEG has been as high as 2.03 and as low as 0.96, with a median of 1.60.
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. BJRI has a P/S ratio of 0.63. This compares to its industry's average P/S of 0.72.
These are only a few of the key metrics included in BJ's Restaurants'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, BJRI looks like an impressive value stock at the moment.
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BJ's Restaurants, Inc. (BJRI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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