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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is The Mosaic Company (MOS). MOS is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
Investors should also recognize that MOS has a P/B ratio of 0.91. 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. MOS's current P/B looks attractive when compared to its industry's average P/B of 1.51. Within the past 52 weeks, MOS's P/B has been as high as 0.91 and as low as 0.61, with a median of 0.73.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. MOS has a P/S ratio of 0.96. This compares to its industry's average P/S of 1.44.
If you're looking for another solid Fertilizers value stock, take a look at Yara International ASA (YARIY). YARIY is a # 1 (Strong Buy) stock with a Value score of A.
Additionally, Yara International ASA has a P/B ratio of 1.14 while its industry's price-to-book ratio sits at 1.51. For YARIY, this valuation metric has been as high as 1.18, as low as 0.87, with a median of 1.01 over the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that The Mosaic Company and Yara International ASA are likely undervalued currently. And when considering the strength of its earnings outlook, MOS and YARIY sticks out as one of the market's strongest value stocks.
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The Mosaic Company (MOS): Free Stock Analysis Report Yara International ASA (YARIY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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