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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 value investors might notice is Fiat Chrysler (FCAU - Free Report) . FCAU is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
Another valuation metric that we should highlight is FCAU's P/B ratio of 0.42. The P/B ratio is used to compare a stock's market value with 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 0.83. Over the past 12 months, FCAU's P/B has been as high as 1.11 and as low as 0.42, with a median of 0.89.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. FCAU has a P/S ratio of 0.1. This compares to its industry's average P/S of 0.24.
Value investors will likely look at more than just these metrics, but the above data helps show that Fiat Chrysler is likely undervalued currently. And when considering the strength of its earnings outlook, FCAU sticks out at as one of the market's strongest value stocks.