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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is Randolph Bancorp . RNDB is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 11.08 right now. For comparison, its industry sports an average P/E of 12.67. Over the past year, RNDB's Forward P/E has been as high as 14.29 and as low as 10.40, with a median of 11.60.
Investors should also recognize that RNDB has a P/B ratio of 1.22. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.69. Over the past year, RNDB's P/B has been as high as 1.36 and as low as 1.04, with a median of 1.12.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. RNDB has a P/S ratio of 1.76. This compares to its industry's average P/S of 2.88.
Finally, investors will want to recognize that RNDB has a P/CF ratio of 7.65. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. RNDB's current P/CF looks attractive when compared to its industry's average P/CF of 17.13. Over the past 52 weeks, RNDB's P/CF has been as high as 8.52 and as low as 3.76, with a median of 4.69.
Value investors will likely look at more than just these metrics, but the above data helps show that Randolph Bancorp is likely undervalued currently. And when considering the strength of its earnings outlook, RNDB sticks out at as one of the market's strongest value stocks.