Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company to watch right now is Dick's Sporting Goods (DKS - Free Report) . DKS is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 7.04, while its industry has an average P/E of 14.30. Over the past year, DKS's Forward P/E has been as high as 13.44 and as low as 7.04, with a median of 11.19.
Investors will also notice that DKS has a PEG ratio of 1.23. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. DKS's industry currently sports an average PEG of 1.39. Over the past 52 weeks, DKS's PEG has been as high as 2.28 and as low as 1.23, with a median of 1.94.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Dick's Sporting Goods is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, DKS feels like a great value stock at the moment.