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, 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 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.
Zions (ZION - Free Report) is a stock many investors are watching right now. ZION is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 11.19 right now. For comparison, its industry sports an average P/E of 12.11. Over the past year, ZION's Forward P/E has been as high as 18.13 and as low as 10.95, with a median of 13.77.
ZION is also sporting a PEG ratio of 1.32. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ZION's industry has an average PEG of 1.32 right now. Over the past 52 weeks, ZION's PEG has been as high as 1.96 and as low as 1.18, with a median of 1.49.
Investors should also recognize that ZION has a P/B ratio of 1.33. 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 solid versus its industry's average P/B of 1.59. Over the past 12 months, ZION's P/B has been as high as 1.63 and as low as 1.26, with a median of 1.47.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. ZION has a P/S ratio of 3.16. This compares to its industry's average P/S of 3.82.
Finally, our model also underscores that ZION has a P/CF ratio of 10.14. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. ZION's current P/CF looks attractive when compared to its industry's average P/CF of 12.71. Within the past 12 months, ZION's P/CF has been as high as 15.51 and as low as 9.60, with a median of 13.18.
Value investors will likely look at more than just these metrics, but the above data helps show that Zions is likely undervalued currently. And when considering the strength of its earnings outlook, ZION sticks out at as one of the market's strongest value stocks.