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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system’s “Value” category. Stocks with “A” grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is Albertsons Companies (ACI – Free Report) . ACI is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 8.57, while its industry has an average P/E of 22.15. Over the past year, ACI’s Forward P/E has been as high as 8.62 and as low as 7.25, with a median of 7.86.
We also note that ACI holds a PEG ratio of 1.07. 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. ACI’s industry currently sports an average PEG of 2.56. Over the last 12 months, ACI’s PEG has been as high as 1.08 and as low as 0.91, with a median of 0.98.
Another valuation metric that we should highlight is ACI’s P/B ratio of 3.82. The P/B ratio pits a stock’s market value against 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 5.26. ACI’s P/B has been as high as 5.26 and as low as 3.44, with a median of 4.02, over the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Albertsons Companies is likely undervalued currently. And when considering the strength of its earnings outlook, ACI sticks out at as one of the market’s strongest value stocks.
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