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Should Value Investors Buy RENAULT (RNLSY) Stock?
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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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.
One stock to keep an eye on is RENAULT (RNLSY - Free Report) . RNLSY 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 3.49 right now. For comparison, its industry sports an average P/E of 7.60. RNLSY's Forward P/E has been as high as 5.49 and as low as 2.32, with a median of 3.81, all within the past year.
Investors should also recognize that RNLSY has a P/B ratio of 0.39. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. RNLSY's current P/B looks attractive when compared to its industry's average P/B of 0.92. RNLSY's P/B has been as high as 0.41 and as low as 0.20, with a median of 0.29, over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that RENAULT is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, RNLSY feels like a great value stock at the moment.