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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 TDK (TTDKY - Free Report) . TTDKY is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
We also note that TTDKY holds a PEG ratio of 1.07. 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. TTDKY's industry has an average PEG of 1.18 right now. Over the past 52 weeks, TTDKY's PEG has been as high as 2.85 and as low as 0.99, with a median of 1.56.
Investors should also recognize that TTDKY has a P/B ratio of 1.74. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 3.07. Over the past year, TTDKY's P/B has been as high as 1.79 and as low as 1.15, with a median of 1.48.
Finally, investors will want to recognize that TTDKY has a P/CF ratio of 8.74. 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. This stock's P/CF looks attractive against its industry's average P/CF of 15.02. Within the past 12 months, TTDKY's P/CF has been as high as 9.08 and as low as 4.09, with a median of 5.63.
These figures are just a handful of the metrics value investors tend to look at, but they help show that TDK is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, TTDKY feels like a great value stock at the moment.