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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One stock to keep an eye on is L Brands (LB - Free Report) . LB is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 10.09, while its industry has an average P/E of 12.41. Over the last 12 months, LB's Forward P/E has been as high as 15.98 and as low as 9.07, with a median of 11.73.
We also note that LB holds a PEG ratio of 0.92. 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. LB's PEG compares to its industry's average PEG of 1.07. Within the past year, LB's PEG has been as high as 1.39 and as low as 0.82, with a median of 1.02.
Finally, investors will want to recognize that LB has a P/CF ratio of 5.69. 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. LB's current P/CF looks attractive when compared to its industry's average P/CF of 7.80. Over the past year, LB's P/CF has been as high as 10.32 and as low as 5.07, with a median of 6.59.
These figures are just a handful of the metrics value investors tend to look at, but they help show that L Brands is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, LB feels like a great value stock at the moment.