Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is Piedmont Realty Trust, Inc. (PDM). PDM 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 6.36 right now. For comparison, its industry sports an average P/E of 16.23. Over the past year, PDM's Forward P/E has been as high as 7.42 and as low as 4.06, with a median of 5.54.
Investors should also recognize that PDM has a P/B ratio of 0.72. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.86. Over the past 12 months, PDM's P/B has been as high as 0.84 and as low as 0.46, with a median of 0.63.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. PDM has a P/S ratio of 1.58. This compares to its industry's average P/S of 3.91.
Finally, investors should note that PDM has a P/CF ratio of 7.02. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. PDM's current P/CF looks attractive when compared to its industry's average P/CF of 16.05. Over the past 52 weeks, PDM's P/CF has been as high as 8.83 and as low as 4.29, with a median of 6.18.
These are just a handful of the figures considered in Piedmont Realty Trust, Inc.'s great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that PDM is an impressive value stock right now.
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Piedmont Realty Trust, Inc. (PDM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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