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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company to watch right now is New Gold (NGD). NGD is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 7.90, while its industry has an average P/E of 13.57. Over the past 52 weeks, NGD's Forward P/E has been as high as 16.92 and as low as 6.98, with a median of 11.29.
Investors should also note that NGD holds a PEG ratio of 0.25. 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. NGD's PEG compares to its industry's average PEG of 0.48. Within the past year, NGD's PEG has been as high as 0.75 and as low as 0.22, with a median of 0.61.
Finally, investors should note that NGD has a P/CF ratio of 8.20. 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 9.34. NGD's P/CF has been as high as 9.59 and as low as 5.33, with a median of 7.35, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that New Gold is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, NGD feels like a great value stock at the moment.
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New Gold Inc. (NGD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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