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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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 FitLife Brands (FTLF). FTLF is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 13.17, while its industry has an average P/E of 17.57. Over the past year, FTLF's Forward P/E has been as high as 17.71 and as low as 9.21, with a median of 13.20.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. FTLF has a P/S ratio of 0.9. This compares to its industry's average P/S of 1.62.
Investors could also keep in mind VAREX IMAGING (VREX), another Medical - Products stock with a Zacks Rank of #2 (Buy) and Value grade of A.
Shares of VAREX IMAGING currently hold a Forward P/E ratio of 12.78, and its PEG ratio is 2.47. In comparison, its industry sports average P/E and PEG ratios of 17.57 and 1.97.
VAREX IMAGING sports a P/B ratio of 1.08 as well; this compares to its industry's price-to-book ratio of 2.49. In the past 52 weeks, VREX's P/B has been as high as 1.24, as low as 0.50, with a median of 0.94.
Value investors will likely look at more than just these metrics, but the above data helps show that FitLife Brands and VAREX IMAGING are likely undervalued currently. And when considering the strength of its earnings outlook, FTLF and VREX sticks out as one of the market's strongest value stocks.
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