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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the “Value” category. Stocks with high Zacks Ranks and “A” grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is The Travelers Companies (TRV – Free Report) . TRV is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 12.78, while its industry has an average P/E of 27.35. Over the past year, TRV’s Forward P/E has been as high as 17.36 and as low as 10.68, with a median of 11.96.
We also note that TRV holds a PEG ratio of 1.14. 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. TRV’s industry has an average PEG of 2.81 right now. Over the last 12 months, TRV’s PEG has been as high as 1.71 and as low as 0.98, with a median of 1.07.
Finally, we should also recognize that TRV has a P/CF ratio of 4.60. This metric takes into account a company’s operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. TRV’s current P/CF looks attractive when compared to its industry’s average P/CF of 7.95. Over the past year, TRV’s P/CF has been as high as 5.35 and as low as 4.24, with a median of 4.81.
Value investors will likely look at more than just these metrics, but the above data helps show that The Travelers Companies is likely undervalued currently. And when considering the strength of its earnings outlook, TRV sticks out at as one of the market’s strongest value stocks.
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