While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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 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 Ahold NV (ADRNY). ADRNY 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 13.87, while its industry has an average P/E of 16.47. ADRNY's Forward P/E has been as high as 14.62 and as low as 11.79, with a median of 12.56, all within the past year.
Investors should also note that ADRNY holds a PEG ratio of 1.46. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ADRNY's PEG compares to its industry's average PEG of 2.37. ADRNY's PEG has been as high as 1.63 and as low as 1.02, with a median of 1.37, all within the past year.
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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. ADRNY has a P/S ratio of 0.44. This compares to its industry's average P/S of 1.05.
Finally, our model also underscores that ADRNY has a P/CF ratio of 6.77. 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 stock's P/CF looks attractive against its industry's average P/CF of 7.20. Within the past 12 months, ADRNY's P/CF has been as high as 8.14 and as low as 5.69, with a median of 6.73.
These are just a handful of the figures considered in Ahold NV'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 ADRNY is an impressive value stock right now.