The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 stock to keep an eye on is ScanSource (SCSC). SCSC is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock has a Forward P/E ratio of 15.06. This compares to its industry's average Forward P/E of 29.39. Over the past 52 weeks, SCSC's Forward P/E has been as high as 15.46 and as low as 6.92, with a median of 12.53.
We also note that SCSC holds a PEG ratio of 1.51. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. SCSC's industry currently sports an average PEG of 1.53. Over the last 12 months, SCSC's PEG has been as high as 1.55 and as low as 0.69, with a median of 1.25.
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. SCSC has a P/S ratio of 0.37. This compares to its industry's average P/S of 0.98.
Value investors will likely look at more than just these metrics, but the above data helps show that ScanSource is likely undervalued currently. And when considering the strength of its earnings outlook, SCSC sticks out at as one of the market's strongest value stocks.
Free: 5 Stocks to Buy As Infrastructure Spending Soars
Trillions of dollars in Federal funds have been earmarked to repair and upgrade America’s infrastructure. In addition to roads and bridges, this flood of cash will pour into AI data centers, renewable energy sources and more.
In, you’ll discover 5 surprising stocks positioned to profit the most from the spending spree that’s just getting started in this space.
Download How to Profit from the Trillion-Dollar Infrastructure Boom absolutely free today.ScanSource, Inc. (SCSC) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
