Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
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 stock to keep an eye on is CBD (CBD - Free Report) . CBD is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 12.81, which compares to its industry's average of 22.45. Over the past 52 weeks, CBD's Forward P/E has been as high as 23.10 and as low as 7.09, with a median of 15.60.
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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CBD has a P/S ratio of 0.2. This compares to its industry's average P/S of 0.25.
Finally, our model also underscores that CBD has a P/CF ratio of 6.21. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 11.29. Within the past 12 months, CBD's P/CF has been as high as 10.70 and as low as 4.46, with a median of 7.80.
These are just a handful of the figures considered in CBD'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 CBD is an impressive value stock right now.