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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 LaZBoy (LZB). LZB is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value.
Another valuation metric that we should highlight is LZB's P/B ratio of 1.35. 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. LZB's current P/B looks attractive when compared to its industry's average P/B of 1.54. Over the past 12 months, LZB's P/B has been as high as 1.95 and as low as 1.35, with a median of 1.65.
Finally, our model also underscores that LZB has a P/CF ratio of 6.00. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 7.77. Over the past year, LZB's P/CF has been as high as 8.04 and as low as 5.96, with a median of 6.79.
These are only a few of the key metrics included in LaZBoy's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, LZB looks like an impressive value stock at the moment.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
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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.
