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 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 company to watch right now is Allstate (ALL - Free Report) . ALL is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 7.93 right now. For comparison, its industry sports an average P/E of 22.37. Over the past year, ALL's Forward P/E has been as high as 12.14 and as low as 7.06, with a median of 9.76.
Investors should also note that ALL holds a PEG ratio of 1.06. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ALL's PEG compares to its industry's average PEG of 3.09. Over the past 52 weeks, ALL's PEG has been as high as 1.46 and as low as 0.85, with a median of 1.26.
We should also highlight that ALL has a P/B ratio of 1.19. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.20. ALL's P/B has been as high as 1.71 and as low as 1, with a median of 1.46, over the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. ALL has a P/S ratio of 0.68. This compares to its industry's average P/S of 0.79.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Allstate is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ALL feels like a great value stock at the moment.