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, 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 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 value investors might notice is Aecom Technology (ACM - Free Report) . ACM is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 10.38, while its industry has an average P/E of 12.28. Over the past year, ACM's Forward P/E has been as high as 12.26 and as low as 8.85, with a median of 10.86.
Investors should also recognize that ACM has a P/B ratio of 1.12. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. ACM's current P/B looks attractive when compared to its industry's average P/B of 1.57. ACM's P/B has been as high as 1.30 and as low as 0.94, with a median of 1.18, over the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. ACM has a P/S ratio of 0.24. This compares to its industry's average P/S of 0.59.
Value investors will likely look at more than just these metrics, but the above data helps show that Aecom Technology is likely undervalued currently. And when considering the strength of its earnings outlook, ACM sticks out at as one of the market's strongest value stocks.