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.
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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company to watch right now is Qorvo (QRVO - Free Report) . QRVO is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 11.73, which compares to its industry's average of 11.88. Over the last 12 months, QRVO's Forward P/E has been as high as 13.97 and as low as 10.22, with a median of 12.38.
Investors should also recognize that QRVO has a P/B ratio of 2.11. 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 stock's P/B looks solid versus its industry's average P/B of 2.54. Over the past year, QRVO's P/B has been as high as 2.31 and as low as 1.69, with a median of 2.06.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. QRVO has a P/S ratio of 3.01. This compares to its industry's average P/S of 3.49.
Value investors will likely look at more than just these metrics, but the above data helps show that Qorvo is likely undervalued currently. And when considering the strength of its earnings outlook, QRVO sticks out at as one of the market's strongest value stocks.