Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 CNA Financial (CNA). CNA is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 10.26 right now. For comparison, its industry sports an average P/E of 27.77. Over the last 12 months, CNA's Forward P/E has been as high as 11.18 and as low as 9.52, with a median of 10.28.
Investors will also notice that CNA has a PEG ratio of 4.12. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CNA's industry has an average PEG of 4.25 right now. Within the past year, CNA's PEG has been as high as 9.20 and as low as 3.19, with a median of 5.60.
Investors should also recognize that CNA has a P/B ratio of 1.22. 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 solid versus its industry's average P/B of 1.56. CNA's P/B has been as high as 1.42 and as low as 1.10, with a median of 1.24, over the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CNA has a P/S ratio of 0.89. This compares to its industry's average P/S of 1.3.
Donegal Group (DGICA) may be another strong Insurance - Property and Casualty stock to add to your shortlist. DGICA is a Zacks Rank of #1 (Strong Buy) stock with a Value grade of A.
Additionally, Donegal Group has a P/B ratio of 1.13 while its industry's price-to-book ratio sits at 1.56. For DGICA, this valuation metric has been as high as 1.28, as low as 0.93, with a median of 1.06 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that CNA Financial and Donegal Group are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CNA and DGICA feels like a great value stock at the moment.
Zacks Names #1 Semiconductor Stock
This under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.
See This Stock Now for Free >>CNA Financial Corporation (CNA) : Free Stock Analysis Report
Donegal Group, Inc. (DGICA) : Free Stock Analysis Report
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.
