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 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 company value investors might notice is Hertz (HTZ - Free Report) . HTZ is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 11.95. This compares to its industry's average Forward P/E of 16.80. HTZ's Forward P/E has been as high as 1,265.90 and as low as -275.67, with a median of 20.12, all within the past year.
Another notable valuation metric for HTZ is its P/B ratio of 1.34. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 3.60. HTZ's P/B has been as high as 1.71 and as low as 0.89, with a median of 1.27, over the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Hertz is likely undervalued currently. And when considering the strength of its earnings outlook, HTZ sticks out at as one of the market's strongest value stocks.