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.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 company to watch right now is Greif (GEF). GEF is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 9.75. This compares to its industry's average Forward P/E of 13.81. Over the last 12 months, GEF's Forward P/E has been as high as 16.95 and as low as 9.57, with a median of 12.61.
Investors will also notice that GEF has a PEG ratio of 0.97. 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. GEF's industry currently sports an average PEG of 1.39. Over the past 52 weeks, GEF's PEG has been as high as 1.70 and as low as 0.96, with a median of 1.26.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. GEF has a P/S ratio of 0.52. This compares to its industry's average P/S of 1.04.
Value investors will likely look at more than just these metrics, but the above data helps show that Greif is likely undervalued currently. And when considering the strength of its earnings outlook, GEF sticks out at as one of the market's strongest value stocks.
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Greif, Inc. (GEF): 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.
