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Should Value Investors Buy RWE (RWEOY) Stock?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

One stock to keep an eye on is RWE (RWEOY - Free Report) . RWEOY is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 11.32 right now. For comparison, its industry sports an average P/E of 12.39. Over the past 52 weeks, RWEOY's Forward P/E has been as high as 14.36 and as low as 9.25, with a median of 12.06.

RWEOY is also sporting a PEG ratio of 0.88. 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. RWEOY's industry has an average PEG of 2.07 right now. Within the past year, RWEOY's PEG has been as high as 1.28 and as low as 0.56, with a median of 0.73.

We should also highlight that RWEOY has a P/B ratio of 1.10. 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 1.41. RWEOY's P/B has been as high as 1.25 and as low as 0.84, with a median of 1.09, over the past year.

These figures are just a handful of the metrics value investors tend to look at, but they help show that RWE is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, RWEOY feels like a great value stock at the moment.


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