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.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 Berry Global (BERY - Free Report) . BERY is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 9.56 right now. For comparison, its industry sports an average P/E of 17.01. BERY's Forward P/E has been as high as 14.74 and as low as 6.19, with a median of 10.22, all within the past year.
Investors will also notice that BERY has a PEG ratio of 0.77. 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. BERY's industry currently sports an average PEG of 1.91. BERY's PEG has been as high as 1.47 and as low as 0.50, with a median of 0.85, all within the past year.
Another notable valuation metric for BERY is its P/B ratio of 3.38. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 6.71. BERY's P/B has been as high as 4.70 and as low as 2, with a median of 3.40, over the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. BERY has a P/S ratio of 0.51. This compares to its industry's average P/S of 0.9.
These are just a handful of the figures considered in Berry Global'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 BERY is an impressive value stock right now.