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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 Sprint (S - Free Report) . S is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
We should also highlight that S has a P/B ratio of 0.82. 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 1.40. Within the past 52 weeks, S's P/B has been as high as 1.24 and as low as 0.73, with a median of 0.83.
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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. S has a P/S ratio of 0.71. This compares to its industry's average P/S of 1.19.
Finally, we should also recognize that S has a P/CF ratio of 1.45. 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. This stock's P/CF looks attractive against its industry's average P/CF of 3.61. S's P/CF has been as high as 3.15 and as low as 1.24, with a median of 1.45, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Sprint is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, S feels like a great value stock at the moment.