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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 stock to keep an eye on is BJ's Restaurants (BJRI). BJRI is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 18.87 right now. For comparison, its industry sports an average P/E of 25.85. Over the last 12 months, BJRI's Forward P/E has been as high as 28.43 and as low as 16.91, with a median of 23.37.
Investors will also notice that BJRI has a PEG ratio of 1.35. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. BJRI's PEG compares to its industry's average PEG of 2.08. BJRI's PEG has been as high as 2.03 and as low as 1.21, with a median of 1.67, all within the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. BJRI has a P/S ratio of 0.62. This compares to its industry's average P/S of 0.73.
Finally, investors will want to recognize that BJRI has a P/CF ratio of 8.51. 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. BJRI's P/CF compares to its industry's average P/CF of 22.40. BJRI's P/CF has been as high as 9.82 and as low as 6.58, with a median of 8.48, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that BJ's Restaurants is likely undervalued currently. And when considering the strength of its earnings outlook, BJRI sticks out at as one of the market's strongest value stocks.
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BJ's Restaurants, Inc. (BJRI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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