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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 company value investors might notice is Brennt (BNTGY). BNTGY is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 13.92 right now. For comparison, its industry sports an average P/E of 21.67. Over the past year, BNTGY's Forward P/E has been as high as 15.62 and as low as 11.03, with a median of 13.13.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. BNTGY has a P/S ratio of 0.52. This compares to its industry's average P/S of 0.79.
Another great Chemical - Diversified stock you could consider is Methanex (MEOH), which is a Zacks Rank of #2 (Buy) stock with a Value Score of A.
Methanex also has a P/B ratio of 1.03 compared to its industry's price-to-book ratio of 1.66. Over the past year, its P/B ratio has been as high as 1.52, as low as 0.69, with a median of 1.05.
Value investors will likely look at more than just these metrics, but the above data helps show that Brennt and Methanex are likely undervalued currently. And when considering the strength of its earnings outlook, BNTGY and MEOH sticks out as one of the market's strongest value stocks.
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Brenntag AG (BNTGY): Free Stock Analysis Report Methanex Corporation (MEOH): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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