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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
Industrias Bachoco (IBA - Free Report) is a stock many investors are watching right now. IBA is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 11.25. This compares to its industry's average Forward P/E of 12.17. IBA's Forward P/E has been as high as 20.20 and as low as 10.94, with a median of 13.26, all within the past year.
Another notable valuation metric for IBA is its P/B ratio of 1.45. The P/B ratio pits a stock's market value against 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 2.55. IBA's P/B has been as high as 1.82 and as low as 1.33, with a median of 1.55, over the past year.
Finally, we should also recognize that IBA has a P/CF ratio of 8.17. 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. IBA's current P/CF looks attractive when compared to its industry's average P/CF of 9.32. IBA's P/CF has been as high as 11.57 and as low as 7.50, with a median of 9.04, all within the past year.
These are only a few of the key metrics included in Industrias Bachoco's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, IBA looks like an impressive value stock at the moment.