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.
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.
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 Macy's (M). M is currently holding a Zacks Rank #1 (Strong Buy) and a Value grade of A. The stock has a Forward P/E ratio of 9.15. This compares to its industry's average Forward P/E of 15.66. M's Forward P/E has been as high as 9.61 and as low as 4.69, with a median of 6.13, all within the past year.
We should also highlight that M has a P/B ratio of 1.06. 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 2.50. M's P/B has been as high as 1.21 and as low as 0.61, with a median of 0.86, over the past year.
Finally, investors should note that M has a P/CF ratio of 3.47. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. M's P/CF compares to its industry's average P/CF of 8.67. Over the past year, M's P/CF has been as high as 5.04 and as low as 1.92, with a median of 2.70.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Macy's is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, M feels like a great value stock at the moment.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
