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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 company to watch right now is Stride (LRN). LRN is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 16.42, which compares to its industry's average of 20.56. Over the last 12 months, LRN's Forward P/E has been as high as 16.42 and as low as 12.10, with a median of 13.80.
Investors should also note that LRN holds a PEG ratio of 0.82. 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. LRN's industry currently sports an average PEG of 1.17. Within the past year, LRN's PEG has been as high as 0.82 and as low as 0.61, with a median of 0.69.
Investors should also recognize that LRN has a P/B ratio of 3.14. 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 stock's P/B looks attractive against its industry's average P/B of 3.67. Over the past year, LRN's P/B has been as high as 3.14 and as low as 1.97, with a median of 2.61.
Value investors will likely look at more than just these metrics, but the above data helps show that Stride is likely undervalued currently. And when considering the strength of its earnings outlook, LRN sticks out at as one of the market's strongest value stocks.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
