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.
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.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company to watch right now is Fiat Chrysler (FCAU - Free Report) . FCAU is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 6.69 right now. For comparison, its industry sports an average P/E of 13.18. FCAU's Forward P/E has been as high as 13,013.31 and as low as -2,085.57, with a median of 5.62, all within the past year.
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. FCAU has a P/S ratio of 0.24. This compares to its industry's average P/S of 0.36.
Finally, we should also recognize that FCAU has a P/CF ratio of 4.45. 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 4.93. Within the past 12 months, FCAU's P/CF has been as high as 4.61 and as low as 0.74, with a median of 1.65.
Value investors will likely look at more than just these metrics, but the above data helps show that Fiat Chrysler is likely undervalued currently. And when considering the strength of its earnings outlook, FCAU sticks out at as one of the market's strongest value stocks.