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 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 company to watch right now is Premier (PINC – Free Report) . PINC is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock holds a P/E ratio of 12.99, while its industry has an average P/E of 15.40. Over the past year, PINC’s Forward P/E has been as high as 19.30 and as low as 8.31, with a median of 13.21.
Another valuation metric that we should highlight is PINC’s P/B ratio of 0.96. 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 solid versus its industry’s average P/B of 1.61. PINC’s P/B has been as high as 1.22 and as low as 0.93, with a median of 1.07, over the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Premier is likely undervalued currently. And when considering the strength of its earnings outlook, PINC sticks out at as one of the market’s strongest value stocks.
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