Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 company value investors might notice is Array Technologies (ARRY). ARRY is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 10.06, while its industry has an average P/E of 17.02. Over the past 52 weeks, ARRY's Forward P/E has been as high as 12.17 and as low as 5.23, with a median of 7.82.
Investors will also notice that ARRY has a PEG ratio of 0.46. 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. ARRY's industry has an average PEG of 0.76 right now. ARRY's PEG has been as high as 1.22 and as low as 0.28, with a median of 0.67, all within 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. ARRY has a P/S ratio of 1.13. This compares to its industry's average P/S of 1.18.
Another great Solar stock you could consider is Shoals Technologies Group (SHLS), which is a Zacks Rank of #2 (Buy) stock with a Value Score of A.
Shares of Shoals Technologies Group are currently trading at a forward earnings multiple of 14.79 and a PEG ratio of 0.62 compared to its industry's P/E and PEG ratios of 17.02 and 0.76, respectively.
Over the past year, SHLS's P/E has been as high as 17.31, as low as 7.04, with a median of 10.80; its PEG ratio has been as high as 0.72, as low as 0.29, with a median of 0.46 during the same time period.
Furthermore, Shoals Technologies Group holds a P/B ratio of 1.79 and its industry's price-to-book ratio is 1.98. SHLS's P/B has been as high as 2.18, as low as 0.84, with a median of 1.52 over the past 12 months.
These are just a handful of the figures considered in Array Technologies and Shoals Technologies Group'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 ARRY and SHLS is an impressive value stock right now.
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Array Technologies, Inc. (ARRY): Free Stock Analysis Report Shoals Technologies Group, Inc. (SHLS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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