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.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company value investors might notice is UBS (UBS). UBS is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 8.21 right now. For comparison, its industry sports an average P/E of 8.84. Over the last 12 months, UBS's Forward P/E has been as high as 10.29 and as low as 6.90, with a median of 9.20.
Investors should also recognize that UBS has a P/B ratio of 1.11. 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 attractive against its industry's average P/B of 1.43. Over the past year, UBS's P/B has been as high as 1.22 and as low as 0.86, with a median of 1.02.
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. UBS has a P/S ratio of 1.6. This compares to its industry's average P/S of 1.7.
Finally, our model also underscores that UBS has a P/CF ratio of 6.76. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. UBS's P/CF compares to its industry's average P/CF of 13.22. Over the past year, UBS's P/CF has been as high as 7.95 and as low as 5.42, with a median of 6.39.
These figures are just a handful of the metrics value investors tend to look at, but they help show that UBS is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, UBS feels like a great value stock at the moment.
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UBS Group AG (UBS): Free Stock Analysis Report
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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.
