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.
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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 company value investors might notice is Barrick Gold (GOLD). GOLD is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 10.92, while its industry has an average P/E of 15.51. Over the past 52 weeks, GOLD's Forward P/E has been as high as 16.96 and as low as 8.73, with a median of 12.58.
Investors should also note that GOLD holds a PEG ratio of 0.33. 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. GOLD's industry has an average PEG of 0.55 right now. GOLD's PEG has been as high as 1.41 and as low as 0.28, with a median of 0.40, all within the past year.
We should also highlight that GOLD has a P/B ratio of 1. The P/B is a method of comparing a stock's market value to 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 2.09. Within the past 52 weeks, GOLD's P/B has been as high as 1.13 and as low as 0.80, with a median of 0.95.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. GOLD has a P/S ratio of 2.51. This compares to its industry's average P/S of 3.49.
Finally, investors will want to recognize that GOLD has a P/CF ratio of 8.28. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 11.41. GOLD's P/CF has been as high as 10.47 and as low as 6.63, with a median of 8.47, all within the past year.
These are just a handful of the figures considered in Barrick Gold'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 GOLD is an impressive value stock right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Barrick Gold Corporation (GOLD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
