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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 Ingredion (INGR). INGR is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 12.50. This compares to its industry's average Forward P/E of 15.39. Over the past year, INGR's Forward P/E has been as high as 14.44 and as low as 10.92, with a median of 11.96.
Investors should also note that INGR holds a PEG ratio of 1.14. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. INGR's PEG compares to its industry's average PEG of 1.32. Within the past year, INGR's PEG has been as high as 1.31 and as low as 0.99, with a median of 1.09.
Finally, investors should note that INGR has a P/CF ratio of 10.34. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 16.76. Over the past 52 weeks, INGR's P/CF has been as high as 11.48 and as low as 8.20, with a median of 9.01.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Ingredion is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, INGR feels like a great value stock at the moment.
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This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
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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.
