While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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.
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 value investors might notice is Iamgold (IAG). IAG is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 8.05, which compares to its industry's average of 13.66. Over the past year, IAG's Forward P/E has been as high as 11.58 and as low as 6.48, with a median of 9.07.
IAG is also sporting a PEG ratio of 0.28. 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. IAG's PEG compares to its industry's average PEG of 0.49. IAG's PEG has been as high as 1.23 and as low as 0.28, with a median of 0.37, all within the past year.
We should also highlight that IAG has a P/B ratio of 1.14. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.76. IAG's P/B has been as high as 1.34 and as low as 0.76, with a median of 0.96, over the past year.
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. IAG has a P/S ratio of 2.43. This compares to its industry's average P/S of 3.46.
Finally, investors should note that IAG has a P/CF ratio of 3.63. 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 10. Over the past year, IAG's P/CF has been as high as 7.80 and as low as 2.68, with a median of 3.40.
Kinross Gold (KGC) may be another strong Mining - Gold stock to add to your shortlist. KGC is a # 2 (Buy) stock with a Value grade of A.
Kinross Gold is trading at a forward earnings multiple of 12.78 at the moment, with a PEG ratio of 0.60. This compares to its industry's average P/E of 13.66 and average PEG ratio of 0.49.
KGC's Forward P/E has been as high as 17.79 and as low as 10.27, with a median of 13.62. During the same time period, its PEG ratio has been as high as 0.98, as low as 0.32, with a median of 0.48.
Furthermore, Kinross Gold holds a P/B ratio of 2.47 and its industry's price-to-book ratio is 1.76. KGC's P/B has been as high as 2.62, as low as 1.45, with a median of 1.81 over the past 12 months.
Value investors will likely look at more than just these metrics, but the above data helps show that Iamgold and Kinross Gold are likely undervalued currently. And when considering the strength of its earnings outlook, IAG and KGC sticks out as one of the market's strongest value stocks.
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Iamgold Corporation (IAG): Free Stock Analysis Report Kinross Gold Corporation (KGC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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