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.
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 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 stock to keep an eye on is NRG Yield (CWEN). CWEN is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 13.25, while its industry has an average P/E of 15.71. CWEN's Forward P/E has been as high as 29.82 and as low as 8.92, with a median of 13.06, all within the past year.
CWEN is also sporting a PEG ratio of 1.32. 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. CWEN's industry has an average PEG of 1.65 right now. Over the past 52 weeks, CWEN's PEG has been as high as 2.98 and as low as 0.40, with a median of 1.31.
These figures are just a handful of the metrics value investors tend to look at, but they help show that NRG Yield is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CWEN feels like a great value stock at the moment.