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, 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.
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 stock to keep an eye on is Resources Connection (RECN - Free Report) . RECN is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 9.23, which compares to its industry's average of 12.93. Over the last 12 months, RECN's Forward P/E has been as high as 17.37 and as low as 9, with a median of 14.80.
Investors should also recognize that RECN has a P/B ratio of 0.99. 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 2.40. Over the past 12 months, RECN's P/B has been as high as 2.02 and as low as 0.96, with a median of 1.78.
Finally, our model also underscores that RECN has a P/CF ratio of 7.10. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. RECN's current P/CF looks attractive when compared to its industry's average P/CF of 9.38. Over the past year, RECN's P/CF has been as high as 16.30 and as low as 6.93, with a median of 12.77.
These are just a handful of the figures considered in Resources Connection'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 RECN is an impressive value stock right now.