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.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 company to watch right now is Insteel Industries (IIIN – Free Report) . IIIN is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A.
Another notable valuation metric for IIIN is its P/B ratio of 1.64. 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. This company’s current P/B looks solid when compared to its industry’s average P/B of 1.68. Within the past 52 weeks, IIIN’s P/B has been as high as 2.23 and as low as 1.41, with a median of 1.72.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock’s price with the company’s revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. IIIN has a P/S ratio of 1. This compares to its industry’s average P/S of 1.01.
Value investors will likely look at more than just these metrics, but the above data helps show that Insteel Industries is likely undervalued currently. And when considering the strength of its earnings outlook, IIIN sticks out at as one of the market’s strongest value stocks.
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