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.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is Balfour Beatty PLC (BAFYY). BAFYY is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 10.32 right now. For comparison, its industry sports an average P/E of 14.24. Over the last 12 months, BAFYY's Forward P/E has been as high as 12.70 and as low as 7.68, with a median of 9.42.
We should also highlight that BAFYY has a P/B ratio of 1.48. 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 1.80. Over the past 12 months, BAFYY's P/B has been as high as 1.65 and as low as 0.99, with a median of 1.30.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Balfour Beatty PLC is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BAFYY feels like a great value stock at the moment.