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.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 stock to keep an eye on is Information Services Group (III). III is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 10.92, while its industry has an average P/E of 23.01. III's Forward P/E has been as high as 13.73 and as low as 10.19, with a median of 11.88, all within the past year.
Investors should also note that III holds a PEG ratio of 0.78. 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. III's PEG compares to its industry's average PEG of 2. III's PEG has been as high as 1.06 and as low as 0.76, with a median of 0.91, all within the past year.
Investors should also recognize that III has a P/B ratio of 2.72. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 5.62. Over the past 12 months, III's P/B has been as high as 3.08 and as low as 2.56, with a median of 2.76.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Information Services Group is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, III feels like a great value stock at the moment.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report