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 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 company value investors might notice is Signet Jewelers (SIG). SIG is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 8.55, which compares to its industry's average of 8.58. Over the last 12 months, SIG's Forward P/E has been as high as 9.21 and as low as 5.21, with a median of 7.44.
SIG is also sporting a PEG ratio of 0.70. 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. SIG's PEG compares to its industry's average PEG of 0.71. Within the past year, SIG's PEG has been as high as 3.86 and as low as 0.39, with a median of 0.91.
Another notable valuation metric for SIG is its P/B ratio of 1.89. 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 stock's P/B looks solid versus its industry's average P/B of 3.04. Over the past year, SIG's P/B has been as high as 2.52 and as low as 1.04, with a median of 1.81.
Value investors will likely look at more than just these metrics, but the above data helps show that Signet Jewelers is likely undervalued currently. And when considering the strength of its earnings outlook, SIG sticks out as one of the market's strongest value stocks.
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
Signet Jewelers Limited (SIG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
