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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 stock to keep an eye on is Information Services Group (III). III is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 12.24. This compares to its industry's average Forward P/E of 24.74. Over the past year, III's Forward P/E has been as high as 17.33 and as low as 7.78, with a median of 10.08.
Investors will also notice that III has a PEG ratio of 0.77. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. III's PEG compares to its industry's average PEG of 1.82. Over the last 12 months, III's PEG has been as high as 1.20 and as low as 0.44, with a median of 0.68.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. III has a P/S ratio of 0.72. This compares to its industry's average P/S of 1.71.
These are only a few of the key metrics included in Information Services Group'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, III looks like an impressive value stock at the moment.
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Information Services Group, Inc. (III): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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