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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company value investors might notice is Popular (BPOP). BPOP is currently sporting a Zacks Rank #2 (Buy) and an A for Value.
BPOP is also sporting a PEG ratio of 0.61. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. BPOP's industry has an average PEG of 0.82 right now. Within the past year, BPOP's PEG has been as high as 0.92 and as low as 0.50, with a median of 0.60.
Another notable valuation metric for BPOP is its P/B ratio of 1.48. The P/B ratio is used to compare a stock's market value with 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 1.75. Within the past 52 weeks, BPOP's P/B has been as high as 1.48 and as low as 0.98, with a median of 1.25.
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. BPOP has a P/S ratio of 1.92. This compares to its industry's average P/S of 2.2.
Value investors will likely look at more than just these metrics, but the above data helps show that Popular is likely undervalued currently. And when considering the strength of its earnings outlook, BPOP sticks out as one of the market's strongest value stocks.
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Popular, Inc. (BPOP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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