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 stock to keep an eye on is Unit (UNT). UNT 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 9.08 right now. For comparison, its industry sports an average P/E of 16.62. UNT's Forward P/E has been as high as 45.69 and as low as 8.32, with a median of 22.79, all within the past year.
Another valuation metric that we should highlight is UNT's P/B ratio of 0.47. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. UNT's current P/B looks attractive when compared to its industry's average P/B of 1.16. Over the past year, UNT's P/B has been as high as 1.04 and as low as 0.43, with a median of 0.84.
Value investors will likely look at more than just these metrics, but the above data helps show that Unit is likely undervalued currently. And when considering the strength of its earnings outlook, UNT sticks out at as one of the market's strongest value stocks.
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