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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is Alibaba (BABA - Free Report) . BABA is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 11.11 right now. For comparison, its industry sports an average P/E of 30.84. Over the last 12 months, BABA's Forward P/E has been as high as 14.90 and as low as 7.91, with a median of 10.85.
Investors will also notice that BABA has a PEG ratio of 0.56. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. BABA's industry has an average PEG of 1.08 right now. Within the past year, BABA's PEG has been as high as 1.65 and as low as 0.52, with a median of 0.88.
Finally, investors will want to recognize that BABA has a P/CF ratio of 14.11. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. BABA's current P/CF looks attractive when compared to its industry's average P/CF of 21.25. Over the past year, BABA's P/CF has been as high as 24.72 and as low as 11.78, with a median of 17.17.
Another great Internet - Commerce stock you could consider is JD.com (JD - Free Report) , which is a # 2 (Buy) stock with a Value Score of A.
Additionally, JD.com has a P/B ratio of 1.31 while its industry's price-to-book ratio sits at 5.29. For JD, this valuation metric has been as high as 2.33, as low as 1.09, with a median of 1.60 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Alibaba and JD.com are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BABA and JD feels like a great value stock at the moment.
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Should Value Investors Buy Alibaba (BABA) Stock?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is Alibaba (BABA - Free Report) . BABA is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 11.11 right now. For comparison, its industry sports an average P/E of 30.84. Over the last 12 months, BABA's Forward P/E has been as high as 14.90 and as low as 7.91, with a median of 10.85.
Investors will also notice that BABA has a PEG ratio of 0.56. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. BABA's industry has an average PEG of 1.08 right now. Within the past year, BABA's PEG has been as high as 1.65 and as low as 0.52, with a median of 0.88.
Finally, investors will want to recognize that BABA has a P/CF ratio of 14.11. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. BABA's current P/CF looks attractive when compared to its industry's average P/CF of 21.25. Over the past year, BABA's P/CF has been as high as 24.72 and as low as 11.78, with a median of 17.17.
Another great Internet - Commerce stock you could consider is JD.com (JD - Free Report) , which is a # 2 (Buy) stock with a Value Score of A.
Additionally, JD.com has a P/B ratio of 1.31 while its industry's price-to-book ratio sits at 5.29. For JD, this valuation metric has been as high as 2.33, as low as 1.09, with a median of 1.60 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Alibaba and JD.com are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BABA and JD feels like a great value stock at the moment.