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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 Knoll (KNL - Free Report) . KNL is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 12.01, which compares to its industry's average of 14.94. Over the last 12 months, KNL's Forward P/E has been as high as 16.27 and as low as 10.50, with a median of 12.01.
Another valuation metric that we should highlight is KNL's P/B ratio of 3.17. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 3.30. Over the past year, KNL's P/B has been as high as 3.34 and as low as 2.58, with a median of 2.92.
Finally, we should also recognize that KNL has a P/CF ratio of 10.32. 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. KNL's current P/CF looks attractive when compared to its industry's average P/CF of 12.85. Within the past 12 months, KNL's P/CF has been as high as 11.99 and as low as 8.60, with a median of 9.94.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Knoll is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, KNL feels like a great value stock at the moment.