While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is Criteo (CRTO). CRTO is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 7.86, which compares to its industry's average of 23.19. Over the past year, CRTO's Forward P/E has been as high as 13.26 and as low as 7.86, with a median of 9.97.
Investors should also recognize that CRTO has a P/B ratio of 1.87. 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. This stock's P/B looks solid versus its industry's average P/B of 3.22. Within the past 52 weeks, CRTO's P/B has been as high as 2.62 and as low as 1.72, with a median of 2.04.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CRTO has a P/S ratio of 1.06. This compares to its industry's average P/S of 1.69.
Finally, we should also recognize that CRTO has a P/CF ratio of 11.37. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 19.28. Within the past 12 months, CRTO's P/CF has been as high as 18.23 and as low as 11.37, with a median of 14.58.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Criteo is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CRTO feels like a great value stock at the moment.
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Free: See Our Top Stock And 4 Runners UpCriteo S.A. (CRTO) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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