Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 company value investors might notice is Leggett & Platt (LEG). LEG is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
We should also highlight that LEG has a P/B ratio of 1.91. 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 attractive against its industry's average P/B of 3.18. Within the past 52 weeks, LEG's P/B has been as high as 3.07 and as low as 1.83, with a median of 2.36.
Finally, investors should note that LEG has a P/CF ratio of 8.13. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. LEG's current P/CF looks attractive when compared to its industry's average P/CF of 10.30. LEG's P/CF has been as high as 10.57 and as low as 7.82, with a median of 9.27, all within the past year.
These are only a few of the key metrics included in Leggett & Platt's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, LEG looks like an impressive value stock at the moment.
Leggett & Platt, Incorporated (LEG) : 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.
