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.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 stock to keep an eye on is Daimler (DDAIF - Free Report) . DDAIF is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 5.25, while its industry has an average P/E of 7.59. Over the past 52 weeks, DDAIF's Forward P/E has been as high as 9.24 and as low as 5.03, with a median of 6.40.
Another valuation metric that we should highlight is DDAIF's P/B ratio of 0.75. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. DDAIF's current P/B looks attractive when compared to its industry's average P/B of 0.90. Within the past 52 weeks, DDAIF's P/B has been as high as 1.54 and as low as 0.71, with a median of 0.95.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. DDAIF has a P/S ratio of 0.3. This compares to its industry's average P/S of 0.43.
Value investors will likely look at more than just these metrics, but the above data helps show that Daimler is likely undervalued currently. And when considering the strength of its earnings outlook, DDAIF sticks out at as one of the market's strongest value stocks.