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.
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 Industrias Bachoco (IBA - Free Report) . IBA is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock holds a P/E ratio of 12, while its industry has an average P/E of 15.20. Over the past 52 weeks, IBA's Forward P/E has been as high as 15.45 and as low as 10.21, with a median of 13.
Another valuation metric that we should highlight is IBA's P/B ratio of 1.22. The P/B is a method of comparing a stock's market value to 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 2.85. Over the past year, IBA's P/B has been as high as 1.39 and as low as 0.96, with a median of 1.24.
Finally, investors will want to recognize that IBA has a P/CF ratio of 12.84. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 13.40. IBA's P/CF has been as high as 16.21 and as low as 6.87, with a median of 12.97, all within the past year.
These are only a few of the key metrics included in Industrias Bachoco's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, IBA looks like an impressive value stock at the moment.