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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 CF Industries (CF). CF is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 13.98. This compares to its industry's average Forward P/E of 17.48. Over the past 52 weeks, CF's Forward P/E has been as high as 15.99 and as low as 9.94, with a median of 14.06.
Another notable valuation metric for CF is its P/B ratio of 1.89. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 2. CF's P/B has been as high as 2.12 and as low as 1.57, with a median of 1.82, over the past year.
Finally, investors will want to recognize that CF has a P/CF ratio of 7.16. 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. CF's current P/CF looks attractive when compared to its industry's average P/CF of 17.17. Over the past year, CF's P/CF has been as high as 8.02 and as low as 5.20, with a median of 7.06.
These are just a handful of the figures considered in CF Industries'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 CF is an impressive value stock right now.
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