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.
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.
One stock to keep an eye on is Hanesbrands (HBI). HBI is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock holds a P/E ratio of 9.17, while its industry has an average P/E of 12.12. Over the last 12 months, HBI's Forward P/E has been as high as 37.17 and as low as 5.89, with a median of 8.39.
We should also highlight that HBI has a P/B ratio of 5.63. 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 solid versus its industry's average P/B of 5.71. Over the past 12 months, HBI's P/B has been as high as 5.97 and as low as 3.31, with a median of 4.97.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. HBI has a P/S ratio of 0.35. This compares to its industry's average P/S of 0.62.
Finally, our model also underscores that HBI has a P/CF ratio of 20.53. 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. HBI's current P/CF looks attractive when compared to its industry's average P/CF of 24.79. Within the past 12 months, HBI's P/CF has been as high as 21.74 and as low as -6.92, with a median of 15.49.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Hanesbrands is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, HBI feels like a great value stock at the moment.
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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.
