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.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company value investors might notice is Knoll (KNL). KNL is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 11.71 right now. For comparison, its industry sports an average P/E of 14.85. KNL's Forward P/E has been as high as 16.27 and as low as 10.50, with a median of 12.02, all within the past year.
Another valuation metric that we should highlight is KNL's P/B ratio of 3.09. Investors use the P/B ratio to look at a stock's market value versus 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 3.30. KNL's P/B has been as high as 3.34 and as low as 2.58, with a median of 2.98, over the past year.
Finally, investors should note that KNL has a P/CF ratio of 10.18. 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. This stock's P/CF looks attractive against its industry's average P/CF of 12.87. KNL's P/CF has been as high as 11.99 and as low as 8.60, with a median of 10.11, all within the past year.
These are just a handful of the figures considered in Knoll'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 KNL is an impressive value stock right now.
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