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 Patrick Industries (PATK). PATK is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 13.37, while its industry has an average P/E of 15.37. Over the last 12 months, PATK's Forward P/E has been as high as 14.11 and as low as 7.03, with a median of 9.88.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. PATK has a P/S ratio of 0.64. This compares to its industry's average P/S of 1.27.
Finally, investors should note that PATK has a P/CF ratio of 8.25. 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 15.55. Over the past 52 weeks, PATK's P/CF has been as high as 8.25 and as low as 4.57, with a median of 6.16.
These are only a few of the key metrics included in Patrick Industries's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, PATK looks like an impressive value stock at the moment.