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.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 to watch right now is Werner Enterprises (WERN). WERN is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 13.41. This compares to its industry's average Forward P/E of 14.87. Over the past year, WERN's Forward P/E has been as high as 31.51 and as low as 12.95, with a median of 18.01.
Another notable valuation metric for WERN is its P/B ratio of 1.96. The P/B ratio pits a stock's market value against 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 2.39. WERN's P/B has been as high as 2.73 and as low as 1.86, with a median of 2.29, over the past year.
Finally, we should also recognize that WERN has a P/CF ratio of 5.12. 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. WERN's P/CF compares to its industry's average P/CF of 9.08. WERN's P/CF has been as high as 9.50 and as low as 4.86, with a median of 6.44, all within the past year.
These are just a handful of the figures considered in Werner Enterprises'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 WERN is an impressive value stock right now.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.