The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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 stock to keep an eye on is Strattec Security (STRT – Free Report) . STRT is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 11.53, which compares to its industry’s average of 18.64. Over the past year, STRT’s Forward P/E has been as high as 26.50 and as low as 11.44, with a median of 16.09.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. STRT has a P/S ratio of 0.33. This compares to its industry’s average P/S of 0.58.
These are only a few of the key metrics included in Strattec Security’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, STRT looks like an impressive value stock at the moment.
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