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.
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 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.
Health Insurance Innovations (HIIQ - Free Report) is a stock many investors are watching right now. HIIQ is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 4.53. This compares to its industry's average Forward P/E of 8.34. Over the past 52 weeks, HIIQ's Forward P/E has been as high as 22.02 and as low as 4.53, with a median of 10.64.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. HIIQ has a P/S ratio of 0.69. This compares to its industry's average P/S of 0.71.
Value investors will likely look at more than just these metrics, but the above data helps show that Health Insurance Innovations is likely undervalued currently. And when considering the strength of its earnings outlook, HIIQ sticks out at as one of the market's strongest value stocks.