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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 Clearway Energy (CWEN). CWEN is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
CWEN is also sporting a PEG ratio of 0.58. 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. CWEN's PEG compares to its industry's average PEG of 0.99. Within the past year, CWEN's PEG has been as high as 7.66 and as low as 0.58, with a median of 1.75.
We should also highlight that CWEN has a P/B ratio of 1.07. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 2.25. Over the past year, CWEN's P/B has been as high as 1.15 and as low as 0.85, with a median of 1.01.
Finally, we should also recognize that CWEN has a P/CF ratio of 3.67. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 8.87. Over the past year, CWEN's P/CF has been as high as 4.19 and as low as 3.19, with a median of 3.61.
These are only a few of the key metrics included in Clearway Energy'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, CWEN looks like an impressive value stock at the moment.
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Clearway Energy, Inc. (CWEN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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