While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 stock to keep an eye on is Radian (RDN - Free Report) . RDN is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 8.19, which compares to its industry's average of 9.56. Over the past year, RDN's Forward P/E has been as high as 8.48 and as low as 5.42, with a median of 7.62.
Investors should also recognize that RDN has a P/B ratio of 1.34. 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. RDN's current P/B looks attractive when compared to its industry's average P/B of 1.35. RDN's P/B has been as high as 1.38 and as low as 0.95, with a median of 1.26, over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Radian is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, RDN feels like a great value stock at the moment.