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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 company to watch right now is The Travelers Companies (TRV). TRV is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 13.24, while its industry has an average P/E of 29.28. Over the past 52 weeks, TRV's Forward P/E has been as high as 14.64 and as low as 10.68, with a median of 12.
Investors should also note that TRV holds a PEG ratio of 3.30. 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. TRV's PEG compares to its industry's average PEG of 4.35. Over the past 52 weeks, TRV's PEG has been as high as 4.80 and as low as 0.98, with a median of 1.08.
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. TRV has a P/S ratio of 1.29. This compares to its industry's average P/S of 1.31.
Finally, we should also recognize that TRV has a P/CF ratio of 5.12. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 9.91. TRV's P/CF has been as high as 5.12 and as low as 4.23, with a median of 4.69, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that The Travelers Companies is likely undervalued currently. And when considering the strength of its earnings outlook, TRV sticks out at as one of the market's strongest value stocks.
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The Travelers Companies, Inc. (TRV): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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