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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
Goodyear (GT) is a stock many investors are watching right now. GT is currently sporting a Zacks Rank #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 6.49, which compares to its industry's average of 7.80. Over the last 12 months, GT's Forward P/E has been as high as 8.55 and as low as 4.70, with a median of 5.88.
GT is also sporting a PEG ratio of 0.42. 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. GT's industry has an average PEG of 0.86 right now. GT's PEG has been as high as 0.44 and as low as 0.17, with a median of 0.24, all within the past year.
Investors should also recognize that GT has a P/B ratio of 0.46. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. GT's current P/B looks attractive when compared to its industry's average P/B of 0.81. Over the past year, GT's P/B has been as high as 0.67 and as low as 0.45, with a median of 0.54.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. GT has a P/S ratio of 0.15. This compares to its industry's average P/S of 0.42.
These are just a handful of the figures considered in Goodyear's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that GT is an impressive value stock right now.
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%.
Free: See Our Top Stock And 4 Runners UpThe Goodyear Tire & Rubber Company (GT) : 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.
