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.
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 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 stock to keep an eye on is ScanSource (SCSC). SCSC is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 13.89 right now. For comparison, its industry sports an average P/E of 28.83. Over the past year, SCSC's Forward P/E has been as high as 15.46 and as low as 8.36, with a median of 13.05.
SCSC is also sporting a PEG ratio of 1.39. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. SCSC's PEG compares to its industry's average PEG of 1.46. Within the past year, SCSC's PEG has been as high as 1.55 and as low as 0.84, with a median of 1.31.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. SCSC has a P/S ratio of 0.38. This compares to its industry's average P/S of 0.95.
These are only a few of the key metrics included in ScanSource'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, SCSC looks like an impressive value stock at the moment.
Must-See: Solar Stocks Poised to Skyrocket
The solar industry stands to bounce back as tech companies and the economy transition away from fossil fuels to power the AI boom.
Trillions of dollars will be invested in clean energy over the coming years – and analysts predict solar will account for 80% of the renewable energy expansion. This creates an outsized opportunity to profit in the near-term and for years to come. But you have to pick the right stocks to get into.
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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.
