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 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 The Japan Steel Works Ltd (JPSWY - Free Report) . JPSWY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 10.30, which compares to its industry's average of 21.72. Over the last 12 months, JPSWY's Forward P/E has been as high as 13.70 and as low as 8.43, with a median of 10.19.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. JPSWY has a P/S ratio of 0.45. This compares to its industry's average P/S of 0.95.
These are only a few of the key metrics included in The Japan Steel Works Ltd's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, JPSWY looks like an impressive value stock at the moment.