Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
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.
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.
WhiteHorse Finance (WHF – Free Report) is a stock many investors are watching right now. WHF is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 6.74. This compares to its industry’s average Forward P/E of 9.32. Over the last 12 months, WHF’s Forward P/E has been as high as 8.03 and as low as 5.83, with a median of 7.15.
Another notable valuation metric for WHF is its P/B ratio of 0.77. 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 0.99. WHF’s P/B has been as high as 0.98 and as low as 0.75, with a median of 0.91, over the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. WHF has a P/S ratio of 2.36. This compares to its industry’s average P/S of 3.62.
These are only a few of the key metrics included in WhiteHorse Finance’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, WHF looks like an impressive value stock at the moment.
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