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, 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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is LaZBoy (LZB). LZB is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
Another notable valuation metric for LZB is its P/B ratio of 1.78. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. LZB's current P/B looks attractive when compared to its industry's average P/B of 1.89. LZB's P/B has been as high as 1.87 and as low as 1.38, with a median of 1.62, over the past year.
Finally, investors should note that LZB has a P/CF ratio of 7.35. 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. LZB's P/CF compares to its industry's average P/CF of 13.89. Over the past year, LZB's P/CF has been as high as 7.96 and as low as 5.68, with a median of 6.80.
These figures are just a handful of the metrics value investors tend to look at, but they help show that LaZBoy is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, LZB feels like a great value stock at the moment.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners UpLa-Z-Boy Incorporated (LZB) : Free Stock Analysis Report
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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.
