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.
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 POSCO (PKX). PKX is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 9.18. This compares to its industry's average Forward P/E of 9.37. Over the last 12 months, PKX's Forward P/E has been as high as 17.97 and as low as 6.53, with a median of 9.79.
PKX is also sporting a PEG ratio of 0.34. 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. PKX's industry has an average PEG of 0.67 right now. Over the last 12 months, PKX's PEG has been as high as 1.28 and as low as 0.31, with a median of 0.47.
We should also highlight that PKX has a P/B ratio of 0.49. 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. PKX's current P/B looks attractive when compared to its industry's average P/B of 1.33. Over the past year, PKX's P/B has been as high as 0.61 and as low as 0.41, with a median of 0.49.
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. PKX has a P/S ratio of 0.37. This compares to its industry's average P/S of 0.38.
Finally, investors will want to recognize that PKX has a P/CF ratio of 5.91. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. PKX's P/CF compares to its industry's average P/CF of 15.27. Over the past 52 weeks, PKX's P/CF has been as high as 6.51 and as low as 4.56, with a median of 5.57.
These are just a handful of the figures considered in POSCO'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 PKX is an impressive value stock right now.
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