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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is KT (KT). KT is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 8.24. This compares to its industry's average Forward P/E of 10.70. Over the past year, KT's Forward P/E has been as high as 18.18 and as low as 6.09, with a median of 7.11.
Another valuation metric that we should highlight is KT's P/B ratio of 0.82. 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 solid versus its industry's average P/B of 1.11. KT's P/B has been as high as 0.82 and as low as 0.47, with a median of 0.65, 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. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. KT has a P/S ratio of 0.56. This compares to its industry's average P/S of 1.16.
Finally, investors should note that KT has a P/CF ratio of 3.05. 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. KT's P/CF compares to its industry's average P/CF of 4.76. Within the past 12 months, KT's P/CF has been as high as 3.05 and as low as 1.61, with a median of 2.26.
These are just a handful of the figures considered in KT'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 KT is an impressive value stock right now.
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KT Corporation (KT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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