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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 stock to keep an eye on is Carnival (CCL). CCL is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 12.06. This compares to its industry's average Forward P/E of 18.14. CCL's Forward P/E has been as high as 20.07 and as low as 8.45, with a median of 12.80, all within the past year.
Investors will also notice that CCL has a PEG ratio of 0.53. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CCL's PEG compares to its industry's average PEG of 0.84. Within the past year, CCL's PEG has been as high as 0.86 and as low as 0.37, with a median of 0.54.
Another valuation metric that we should highlight is CCL's P/B ratio of 3.03. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 4.51. CCL's P/B has been as high as 3.55 and as low as 2.09, with a median of 2.87, over the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. CCL has a P/S ratio of 1.08. This compares to its industry's average P/S of 1.11.
Finally, our model also underscores that CCL has a P/CF ratio of 6.53. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 13.97. Within the past 12 months, CCL's P/CF has been as high as 8.64 and as low as 4.49, with a median of 6.40.
These are just a handful of the figures considered in Carnival's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that CCL is an impressive value stock right now.
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Carnival Corporation (CCL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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