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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 value investors might notice is Nordstrom (JWN – Free Report) . JWN is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 11.29 right now. For comparison, its industry sports an average P/E of 16.01. Over the past year, JWN’s Forward P/E has been as high as 13.36 and as low as 9.15, with a median of 11.98.
Another valuation metric that we should highlight is JWN’s P/B ratio of 3.52. The P/B ratio pits a stock’s market value against 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 5.17. JWN’s P/B has been as high as 4.65 and as low as 3.27, with a median of 3.88, over the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. JWN has a P/S ratio of 0.27. This compares to its industry’s average P/S of 0.46.
Finally, our model also underscores that JWN has a P/CF ratio of 3.83. 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 13.56. Over the past year, JWN’s P/CF has been as high as 3.86 and as low as 2.76, with a median of 3.32.
These are only a few of the key metrics included in Nordstrom’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, JWN looks like an impressive value stock at the moment.
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