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.
Amerigo Resources (ARREF)
is a stock many investors are watching right now. ARREF is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 6.99, while its industry has an average P/E of 10.62. ARREF’s Forward P/E has been as high as 9.86 and as low as 1.22, with a median of 8.23, all within the past year.
Investors will also notice that ARREF has a PEG ratio of 0.28. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. ARREF’s industry currently sports an average PEG of 0.48. Over the past 52 weeks, ARREF’s PEG has been as high as 0.39 and as low as 0.05, with a median of 0.33.
Another valuation metric that we should highlight is ARREF’s P/B ratio of 1.52. The P/B ratio pits a stock’s market value against 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 2.14. Over the past 12 months, ARREF’s P/B has been as high as 1.99 and as low as 1.19, with a median of 1.44.
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. ARREF has a P/S ratio of 1.03. This compares to its industry’s average P/S of 1.89.
Finally, investors should note that ARREF has a P/CF ratio of 3.46. 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. This company’s current P/CF looks solid when compared to its industry’s average P/CF of 6.60. Over the past 52 weeks, ARREF’s P/CF has been as high as 6.30 and as low as 2.89, with a median of 3.68.
Investors could also keep in mind
Centrus Energy (LEU)
, an Mining – Non Ferrous stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Centrus Energy sports a P/B ratio of -2.10 as well; this compares to its industry’s price-to-book ratio of 2.14. In the past 52 weeks, LEU’s P/B has been as high as -0.99, as low as -5.34, with a median of -3.01.
These are only a few of the key metrics included in Amerigo Resources and Centrus Energy strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, ARREF and LEU look like an impressive value stock at the moment.
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