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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 American Woodmark (AMWD). AMWD is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 14.13, while its industry has an average P/E of 17.29. AMWD's Forward P/E has been as high as 14.13 and as low as 8.82, with a median of 11.34, all within the past year.
We should also highlight that AMWD has a P/B ratio of 2.89. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 4.09. Within the past 52 weeks, AMWD's P/B has been as high as 2.89 and as low as 1.86, with a median of 2.36.
Finally, our model also underscores that AMWD has a P/CF ratio of 9.72. 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 stock's P/CF looks attractive against its industry's average P/CF of 12.71. AMWD's P/CF has been as high as 9.72 and as low as 6.40, with a median of 8.14, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that American Woodmark is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AMWD feels like a great value stock at the moment.