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.
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 Quad/Graphics (QUAD). QUAD 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 12.76, while its industry has an average P/E of 20.73. Over the past 52 weeks, QUAD's Forward P/E has been as high as 14.80 and as low as 11.78, with a median of 12.32.
Another valuation metric that we should highlight is QUAD's P/B ratio of 2.18. 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. This stock's P/B looks solid versus its industry's average P/B of 4.95. QUAD's P/B has been as high as 3.07 and as low as 1.71, with a median of 2.30, over the past year.
Finally, investors will want to recognize that QUAD has a P/CF ratio of 3.94. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. QUAD's current P/CF looks attractive when compared to its industry's average P/CF of 9.27. QUAD's P/CF has been as high as 4.71 and as low as 2.96, with a median of 3.54, all within the past year.
These are just a handful of the figures considered in Quad/Graphics'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 QUAD is an impressive value stock right now.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.