The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
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.
Guess (GES - Free Report) is a stock many investors are watching right now. GES is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 21.33. This compares to its industry's average Forward P/E of 23.48. Over the past 52 weeks, GES's Forward P/E has been as high as 1,496.59 and as low as -1,034.13, with a median of 11.61.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. GES has a P/S ratio of 0.39. This compares to its industry's average P/S of 0.69.
Value investors will likely look at more than just these metrics, but the above data helps show that Guess is likely undervalued currently. And when considering the strength of its earnings outlook, GES sticks out at as one of the market's strongest value stocks.