Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.
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 company to watch right now is HP (HPQ). HPQ 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 12.12 right now. For comparison, its industry sports an average P/E of 16.51. Over the last 12 months, HPQ's Forward P/E has been as high as 13.10 and as low as 10.47, with a median of 11.67.
Investors should also note that HPQ holds a PEG ratio of 1.69. 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. HPQ's PEG compares to its industry's average PEG of 1.78. Within the past year, HPQ's PEG has been as high as 3.81 and as low as 1.67, with a median of 1.89.
Finally, our model also underscores that HPQ has a P/CF ratio of 8.18. 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. HPQ's P/CF compares to its industry's average P/CF of 13.84. Over the past year, HPQ's P/CF has been as high as 14.01 and as low as 7.32, with a median of 8.41.
These are just a handful of the figures considered in HP'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 HPQ is an impressive value stock right now.
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