Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 to watch right now is Office Depot (ODP - Free Report) . ODP is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 5.27 right now. For comparison, its industry sports an average P/E of 13.17. Over the past 52 weeks, ODP's Forward P/E has been as high as 9.14 and as low as 3.19, with a median of 5.74.
ODP is also sporting a PEG ratio of 0.47. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ODP's industry currently sports an average PEG of 1.29. Within the past year, ODP's PEG has been as high as 0.58 and as low as 0.29, with a median of 0.46.
Finally, investors will want to recognize that ODP has a P/CF ratio of 5.09. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 19.80. Over the past 52 weeks, ODP's P/CF has been as high as 7.69 and as low as 3.14, with a median of 4.99.
Value investors will likely look at more than just these metrics, but the above data helps show that Office Depot is likely undervalued currently. And when considering the strength of its earnings outlook, ODP sticks out at as one of the market's strongest value stocks.