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.
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.
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.
United Fire Group (UFCS) is a stock many investors are watching right now. UFCS is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock holds a P/E ratio of 10.16, while its industry has an average P/E of 27.91. Over the past year, UFCS's Forward P/E has been as high as 20.43 and as low as 9.98, with a median of 11.30.
Another valuation metric that we should highlight is UFCS's P/B ratio of 0.94. 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 1.51. Within the past 52 weeks, UFCS's P/B has been as high as 1.02 and as low as 0.62, with a median of 0.87.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. UFCS has a P/S ratio of 0.95. This compares to its industry's average P/S of 1.36.
Finally, we should also recognize that UFCS has a P/CF ratio of 7.83. 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. This stock's P/CF looks attractive against its industry's average P/CF of 11.88. Over the past year, UFCS's P/CF has been as high as 13.42 and as low as 6.53, with a median of 9.51.
These are just a handful of the figures considered in United Fire Group'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 UFCS is an impressive value stock right now.
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