The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is Internet Initiative Japan . IIJI is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 21.70, which compares to its industry's average of 30.58. Over the past 52 weeks, IIJI's Forward P/E has been as high as 27.19 and as low as 19.13, with a median of 22.65.
Investors should also note that IIJI holds a PEG ratio of 1.61. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. IIJI's PEG compares to its industry's average PEG of 1.65. IIJI's PEG has been as high as 1.96 and as low as 1.01, with a median of 1.62, all within the past year.
Another valuation metric that we should highlight is IIJI's P/B ratio of 1.54. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. IIJI's current P/B looks attractive when compared to its industry's average P/B of 4.42. Within the past 52 weeks, IIJI's P/B has been as high as 1.68 and as low as 1.23, with a median of 1.42.
Finally, investors should note that IIJI has a P/CF ratio of 6.11. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. IIJI's current P/CF looks attractive when compared to its industry's average P/CF of 18.98. Over the past year, IIJI's P/CF has been as high as 7.12 and as low as 4.86, with a median of 5.83.
Value investors will likely look at more than just these metrics, but the above data helps show that Internet Initiative Japan is likely undervalued currently. And when considering the strength of its earnings outlook, IIJI sticks out at as one of the market's strongest value stocks.