Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 PVH (PVH). PVH 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 6.27, while its industry has an average P/E of 12.40. Over the past 52 weeks, PVH's Forward P/E has been as high as 10.73 and as low as 4.83, with a median of 7.90.
Investors will also notice that PVH has 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. PVH's PEG compares to its industry's average PEG of 0.94. Over the past 52 weeks, PVH's PEG has been as high as 1.12 and as low as 0.45, with a median of 0.77.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. PVH has a P/S ratio of 0.45. This compares to its industry's average P/S of 0.52.
Value investors will likely look at more than just these metrics, but the above data helps show that PVH is likely undervalued currently. And when considering the strength of its earnings outlook, PVH sticks out at as one of the market's strongest value stocks.
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PVH Corp. (PVH): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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