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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system’s “Value” category. Stocks with both “A” grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is Enersys (ENS – Free Report) . ENS is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 9.58, which compares to its industry’s average of 25.11. Over the past year, ENS’s Forward P/E has been as high as 12.63 and as low as 9.58, with a median of 10.70.
We should also highlight that ENS has a P/B ratio of 2.02. The P/B is a method of comparing a stock’s market value to its book value, which is defined as total assets minus total liabilities. ENS’s current P/B looks attractive when compared to its industry’s average P/B of 5.09. Within the past 52 weeks, ENS’s P/B has been as high as 2.52 and as low as 1.99, with a median of 2.18.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock’s price with the company’s revenue. This is a prefered metric because revenue can’t really be manipulated, so sales are often a truer performance indicator. ENS has a P/S ratio of 1.06. This compares to its industry’s average P/S of 2.96.
Finally, our model also underscores that ENS has a P/CF ratio of 9.94. This data point considers a firm’s operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company’s current P/CF looks solid when compared to its industry’s average P/CF of 35.54. Within the past 12 months, ENS’s P/CF has been as high as 12.46 and as low as 9.71, with a median of 10.74.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Enersys is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ENS feels like a great value stock at the moment.
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