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.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 ABM Industries (ABM). ABM is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 13.57, which compares to its industry's average of 33.62. Over the past year, ABM's Forward P/E has been as high as 15.99 and as low as 11.73, with a median of 13.87.
Investors should also note that ABM holds a PEG ratio of 2.63. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ABM's PEG compares to its industry's average PEG of 5.41. ABM's PEG has been as high as 2.96 and as low as 2.63, with a median of 2.87, all within the past year.
Finally, our model also underscores that ABM has a P/CF ratio of 12.06. 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 38.61. Over the past 52 weeks, ABM's P/CF has been as high as 14.04 and as low as 6.79, with a median of 8.80.
Value investors will likely look at more than just these metrics, but the above data helps show that ABM Industries is likely undervalued currently. And when considering the strength of its earnings outlook, ABM sticks out at as one of the market's strongest value stocks.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
