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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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 Best Buy (BBY - Free Report) . BBY is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 11. This compares to its industry's average Forward P/E of 13.56. Over the past 52 weeks, BBY's Forward P/E has been as high as 15.48 and as low as 8.74, with a median of 11.63.
BBY is also sporting a PEG ratio of 1.81. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. BBY's PEG compares to its industry's average PEG of 2.31. Over the last 12 months, BBY's PEG has been as high as 2.54 and as low as 1.27, with a median of 1.88.
Another valuation metric that we should highlight is BBY's P/B ratio of 5.62. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. BBY's current P/B looks attractive when compared to its industry's average P/B of 6.63. BBY's P/B has been as high as 7.17 and as low as 4.28, with a median of 5.78, over the past year.
Finally, investors should note that BBY has a P/CF ratio of 7.28. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 9.63. Within the past 12 months, BBY's P/CF has been as high as 10.45 and as low as 5.33, with a median of 7.51.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Best Buy is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BBY feels like a great value stock at the moment.
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Should Value Investors Buy Best Buy (BBY) 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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 Best Buy (BBY - Free Report) . BBY is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 11. This compares to its industry's average Forward P/E of 13.56. Over the past 52 weeks, BBY's Forward P/E has been as high as 15.48 and as low as 8.74, with a median of 11.63.
BBY is also sporting a PEG ratio of 1.81. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. BBY's PEG compares to its industry's average PEG of 2.31. Over the last 12 months, BBY's PEG has been as high as 2.54 and as low as 1.27, with a median of 1.88.
Another valuation metric that we should highlight is BBY's P/B ratio of 5.62. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. BBY's current P/B looks attractive when compared to its industry's average P/B of 6.63. BBY's P/B has been as high as 7.17 and as low as 4.28, with a median of 5.78, over the past year.
Finally, investors should note that BBY has a P/CF ratio of 7.28. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 9.63. Within the past 12 months, BBY's P/CF has been as high as 10.45 and as low as 5.33, with a median of 7.51.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Best Buy is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BBY feels like a great value stock at the moment.