Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is Pfizer (PFE - Free Report) . PFE is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 13.60 right now. For comparison, its industry sports an average P/E of 16.09. Over the past year, PFE's Forward P/E has been as high as 15.68 and as low as 10.25, with a median of 14.06.
Another valuation metric that we should highlight is PFE's P/B ratio of 3.20. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. PFE's current P/B looks attractive when compared to its industry's average P/B of 6.84. Over the past 12 months, PFE's P/B has been as high as 4.12 and as low as 2.49, with a median of 3.26.
Finally, our model also underscores that PFE has a P/CF ratio of 9.77. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 16.51. Within the past 12 months, PFE's P/CF has been as high as 14.01 and as low as 7.20, with a median of 9.79.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Pfizer is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, PFE feels like a great value stock at the moment.