The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is Bed Bath & Beyond (BBBY - Free Report) . BBBY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 8.71. This compares to its industry's average Forward P/E of 13.09. Over the past year, BBBY's Forward P/E has been as high as 10.83 and as low as 3.72, with a median of 7.19.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. BBBY has a P/S ratio of 0.18. This compares to its industry's average P/S of 0.41.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Bed Bath & Beyond is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BBBY feels like a great value stock at the moment.