Finding companies with the criteria you want isn’t always easy. You could spend hours searching ticker after ticker, only to find companies which aren’t worthy of your hard earned cash. An easier way to navigate through this is by using high quality stock screeners. Screening helps investors narrow down companies to invest in based on their ability to meet every criteria selected. Any company who misses even one of the criteria requirements will be filtered out.
This lets one easily choose ideal metrics. Screens are effective because they sift out bad stocks and only keep the cream of the crop in. It isn’t always easy to create an effective screen. Our Zacks Premium Screens have helped with this, bringing profits to many investors over time. Our predefined criteria are chosen carefully to capture special kinds of companies.
Today, we’ve dug up three value stocks using one of our premium screens known as “High Rank Value”. Some of the metrics of this screen requires a stock to have a Zacks Rank #2 (Buy) or better as well as a price-to-book under 3. Let’s see the stocks which our comprehensive screen has found for us today.
Xerox Corporation-(XRX - Analyst Report)
Xerox is a leading enterprise for business process and document management. It offers business process outsourcing and IT outsourcing services in addition to selling equipment. XRX is a Zacks Rank #2 (Buy) and it has a market cap of $10.16 billion.
Xerox looks like a bargain across several fundamental valuation metrics. Its stock trades at a forward PE of just 8.88 in comparison to the industry’s average PE of 19. Xerox also has a PEG of 0.89, so it is quite cheap relative to its longer term growth rate. Xerox’s price-to-book ratio is 1.1, and this suggests that the firm could be undervalued. XRX doles out a solid 3.09% dividend.
Our current year EPS estimate has improved over the last three months, going from a consensus of $1.08 to $1.13. There has been one positive estimate revision for fiscal 2016 in the last 60 days. XRX has topped our EPS estimate in three of the last four quarters. In the second quarter, the corporation beat our EPS estimate of $0.25 by 20%. Xerox is expected to release its Q3 earnings results in late October.
Macy’s Inc-(M - Analyst Report)
Macy’s is a premier retailer with over 700 stores. The company sells merchandise from brands that consumers love, such as Calvin Klein, Estée Lauder, Michael Kors, and Tommy Hilfiger. Macy’s is a Zacks Rank #2 (Buy) and it gets an “A” for Value in our Style Scores.
Macy’s trailing twelve month and forward PE ratios are just 10.19 and 10.85 respectively. Macy’s has a PEG of 1.28, so the stock seems like a relatively cheap buy when factoring in its long term projected growth rate. The major retailer rewards its investors with an attractive annual dividend yield of 4.13%.
For the current year, seven analysts have revised their EPS expectations upwards over the last 60 days. No analysts revised their EPS forecasts lower for fiscal 2016 within the last two months, and thanks to positive estimate revision activity, our consensus estimate has improved, going from $3.24 to $3.37. Macy’s has beaten our earnings expectations over each of the last four quarters, and it beat our estimate by 35% last quarter. The corporation is slated to release its Q3 earnings report in early to mid November.
Steelcase Inc-(SCS - Snapshot Report)
Steelcase Inc. designs and manufactures office equipment products. It makes furniture systems, seating, storage, desks, interior architectural products, technology products, and other related products and services. SCS is a Zacks Rank #2 (Buy) and it gets an “A” in Value and Momentum in our Style Scores.
Steelcase trades at a forward PE of 12.67, and this is slightly lower that the industry’s average PE of 13.42. The company has an especially impressive price-to-sales of 0.54 even though its net margin is relatively in line with the industry average. SCS has a price-to-book of 2.27 while the industry’s average price-to-book comes out to 3.7. Steelcase’s dividend yields investors a return of 3.41% per year.
Analysts have unanimously revised their estimates higher for the current quarter and year, and EPS is forecasted to grow by about 7% this year. For the next fiscal year (2018), EPS is expected to see year-over-year growth of 18%. SCS has beaten our consensus estimate for three straight quarters, and it is expected to release its next quarterly earnings results in mid December.
One magical screening ingredient which can’t be overlooked is a Zacks Rank #2 (Buy) or better. The rank helps to find companies which look like dependable earnings candidates. In addition to this great metric, the Zacks Premium Screenshelp you to add other criteria to find the most superior investment choices. While this article outlined potential candidates from one screen, the Zacks Premium service gives you access to the “High Rank Value” and 45 other premium screens designed to give you superior investment returns.
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