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 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 NEXEO SOLUTIONS . NXEO is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value.
We also note that NXEO holds a PEG ratio of 0.29. 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. NXEO's PEG compares to its industry's average PEG of 0.41. Over the past 52 weeks, NXEO's PEG has been as high as 0.96 and as low as 0.28, with a median of 0.55.
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. NXEO has a P/S ratio of 0.2. This compares to its industry's average P/S of 0.56.
Value investors will likely look at more than just these metrics, but the above data helps show that NEXEO SOLUTIONS is likely undervalued currently. And when considering the strength of its earnings outlook, NXEO sticks out at as one of the market's strongest value stocks.