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Should Value Investors Buy Discovery Communications (DISCA) Stock?

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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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 company to watch right now is Discovery Communications . DISCA 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 19.03. Over the past 52 weeks, DISCA's Forward P/E has been as high as 11.89 and as low as 6.98, with a median of 9.07.

Investors should also note that DISCA holds a PEG ratio of 0.44. 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. DISCA's PEG compares to its industry's average PEG of 1.07. Over the last 12 months, DISCA's PEG has been as high as 1.31 and as low as 0.27, with a median of 0.57.

Value investors will likely look at more than just these metrics, but the above data helps show that Discovery Communications is likely undervalued currently. And when considering the strength of its earnings outlook, DISCA sticks out at as one of the market's strongest value stocks.

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