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.
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 company value investors might notice is L Brands . LB is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 14.38, which compares to its industry's average of 15.60. Over the last 12 months, LB's Forward P/E has been as high as 19.91 and as low as 9.84, with a median of 12.45.
Investors should also note that LB holds a PEG ratio of 1.25. 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. LB's industry currently sports an average PEG of 1.32. LB's PEG has been as high as 1.73 and as low as 0.86, with a median of 1.08, all within the past year.
Finally, investors should note that LB has a P/CF ratio of 7.14. 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 8.54. LB's P/CF has been as high as 12.22 and as low as 5.07, with a median of 6.99, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that L Brands is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, LB feels like a great value stock at the moment.
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Are Investors Undervaluing L Brands (LB) Right Now?
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.
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 company value investors might notice is L Brands . LB is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 14.38, which compares to its industry's average of 15.60. Over the last 12 months, LB's Forward P/E has been as high as 19.91 and as low as 9.84, with a median of 12.45.
Investors should also note that LB holds a PEG ratio of 1.25. 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. LB's industry currently sports an average PEG of 1.32. LB's PEG has been as high as 1.73 and as low as 0.86, with a median of 1.08, all within the past year.
Finally, investors should note that LB has a P/CF ratio of 7.14. 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 8.54. LB's P/CF has been as high as 12.22 and as low as 5.07, with a median of 6.99, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that L Brands is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, LB feels like a great value stock at the moment.