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.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 stock to keep an eye on is NCI Building Systems (NCS - Free Report) . NCS is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock holds a P/E ratio of 8.86, while its industry has an average P/E of 11.15. Over the past 52 weeks, NCS's Forward P/E has been as high as 19.71 and as low as 8.86, with a median of 13.76.
Investors should also note that NCS holds a PEG ratio of 0.89. 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. NCS's industry currently sports an average PEG of 0.91. Within the past year, NCS's PEG has been as high as 1.97 and as low as 0.89, with a median of 1.38.
Finally, investors will want to recognize that NCS has a P/CF ratio of 11.85. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 16.74. Within the past 12 months, NCS's P/CF has been as high as 17.99 and as low as 9.57, with a median of 11.95.
These figures are just a handful of the metrics value investors tend to look at, but they help show that NCI Building Systems is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, NCS feels like a great value stock at the moment.