The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company to watch right now is Stora Enso Oyj (SEOAY). SEOAY is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A.
SEOAY is also sporting a PEG ratio of 0.27. 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. SEOAY's PEG compares to its industry's average PEG of 0.35. SEOAY's PEG has been as high as 0.33 and as low as 0.27, with a median of 0.30, all within the past year.
Another valuation metric that we should highlight is SEOAY's P/B ratio of 0.78. 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 solid versus its industry's average P/B of 2.03. Within the past 52 weeks, SEOAY's P/B has been as high as 0.90 and as low as 0.60, with a median of 0.76.
Finally, investors will want to recognize that SEOAY has a P/CF ratio of 7.19. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. SEOAY's current P/CF looks attractive when compared to its industry's average P/CF of 9.42. Over the past 52 weeks, SEOAY's P/CF has been as high as 8.41 and as low as 5.30, with a median of 6.73.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Stora Enso Oyj is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SEOAY feels like a great value stock at the moment.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
