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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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 stock to keep an eye on is Arch Coal (ARCH - Free Report) . ARCH is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 6.62, which compares to its industry's average of 9.02. ARCH's Forward P/E has been as high as 9.97 and as low as 5.53, with a median of 7.90, all within the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. ARCH has a P/S ratio of 0.65. This compares to its industry's average P/S of 1.55.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Arch Coal is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ARCH feels like a great value stock at the moment.
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Is Arch Coal (ARCH) Stock Undervalued 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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 stock to keep an eye on is Arch Coal (ARCH - Free Report) . ARCH is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 6.62, which compares to its industry's average of 9.02. ARCH's Forward P/E has been as high as 9.97 and as low as 5.53, with a median of 7.90, all within the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. ARCH has a P/S ratio of 0.65. This compares to its industry's average P/S of 1.55.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Arch Coal is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ARCH feels like a great value stock at the moment.