While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 to watch right now is Molson Coors (TAP – Free Report) . TAP is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 9.21. This compares to its industry’s average Forward P/E of 15.23. Over the past year, TAP’s Forward P/E has been as high as 11.89 and as low as 8.56, with a median of 9.48.
Investors should also note that TAP holds a PEG ratio of 1.47. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company’s expected EPS growth rate. TAP’s industry currently sports an average PEG of 2.83. Over the past 52 weeks, TAP’s PEG has been as high as 2.72 and as low as 1.45, with a median of 2.21.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock’s price with the company’s sales. This is a prefered metric because revenue can’t really be manipulated, so sales are often a truer performance indicator. TAP has a P/S ratio of 0.87. This compares to its industry’s average P/S of 0.93.
Value investors will likely look at more than just these metrics, but the above data helps show that Molson Coors is likely undervalued currently. And when considering the strength of its earnings outlook, TAP sticks out at as one of the market’s strongest value stocks.
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