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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 Fortuna Silver Mines (FSM - Free Report) . FSM is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
Another valuation metric that we should highlight is FSM's P/B ratio of 0.68. 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. This stock's P/B looks attractive against its industry's average P/B of 1.42. FSM's P/B has been as high as 1.59 and as low as 0.63, with a median of 1, 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. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. FSM has a P/S ratio of 1.56. This compares to its industry's average P/S of 2.17.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Fortuna Silver Mines is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, FSM feels like a great value stock at the moment.