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.
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 company to watch right now is China Life (LFC - Free Report) . LFC is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 6.22 right now. For comparison, its industry sports an average P/E of 9.33. LFC's Forward P/E has been as high as 21.56 and as low as 6.22, with a median of 9.56, all within the past year.
Investors should also recognize that LFC has a P/B ratio of 0.87. 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. LFC's current P/B looks attractive when compared to its industry's average P/B of 1.79. Over the past 12 months, LFC's P/B has been as high as 1.60 and as low as 0.87, with a median of 1.27.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. LFC has a P/S ratio of 0.47. This compares to its industry's average P/S of 0.48.
These are just a handful of the figures considered in China Life's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that LFC is an impressive value stock right now.