The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is Pfizer (PFE). PFE is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 7.98, which compares to its industry's average of 15.63. Over the last 12 months, PFE's Forward P/E has been as high as 12.11 and as low as 7.15, with a median of 9.03.
PFE is also sporting a PEG ratio of 0.89. 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. PFE's PEG compares to its industry's average PEG of 1.38. Within the past year, PFE's PEG has been as high as 1.24 and as low as 0.53, with a median of 0.84.
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 preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. PFE has a P/S ratio of 2.22. This compares to its industry's average P/S of 3.7.
Finally, investors should note that PFE has a P/CF ratio of 9.48. 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 stock's P/CF looks attractive against its industry's average P/CF of 23.11. Over the past 52 weeks, PFE's P/CF has been as high as 43.59 and as low as 8.34, with a median of 13.13.
These are only a few of the key metrics included in Pfizer's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, PFE looks like an impressive value stock at the moment.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Pfizer Inc. (PFE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
