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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.
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 value investors might notice is HD Supply (HDS - Free Report) . HDS is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 11.83 right now. For comparison, its industry sports an average P/E of 15.85. Over the last 12 months, HDS's Forward P/E has been as high as 16.67 and as low as 11.09, with a median of 13.03.
Investors will also notice that HDS has a PEG ratio of 0.86. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. HDS's industry has an average PEG of 0.99 right now. Over the past 52 weeks, HDS's PEG has been as high as 0.91 and as low as 0.62, with a median of 0.80.
Another valuation metric that we should highlight is HDS's P/B ratio of 4.45. The P/B ratio is used to compare a stock's market value with 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 5.88. Within the past 52 weeks, HDS's P/B has been as high as 5.59 and as low as 4.17, with a median of 4.88.
Finally, investors should note that HDS has a P/CF ratio of 9.40. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 14.65. Over the past 52 weeks, HDS's P/CF has been as high as 11.10 and as low as 5.79, with a median of 7.03.
These are just a handful of the figures considered in HD Supply's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that HDS is an impressive value stock right now.