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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One stock to keep an eye on is CACI International (CACI). CACI is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 16.13 right now. For comparison, its industry sports an average P/E of 17.94. Over the last 12 months, CACI's Forward P/E has been as high as 23.74 and as low as 14.76, with a median of 18.67.
Investors will also notice that CACI has a PEG ratio of 1.17. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CACI's industry has an average PEG of 1.70 right now. Over the last 12 months, CACI's PEG has been as high as 2.34 and as low as 1.16, with a median of 1.80.
Another valuation metric that we should highlight is CACI's P/B ratio of 2.47. 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 company's current P/B looks solid when compared to its industry's average P/B of 2.93. Over the past 12 months, CACI's P/B has been as high as 3.51 and as low as 2.16, with a median of 2.80.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CACI has a P/S ratio of 1.15. This compares to its industry's average P/S of 1.26.
These figures are just a handful of the metrics value investors tend to look at, but they help show that CACI International is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CACI feels like a great value stock at the moment.
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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.
