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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
Information Services Group (III) is a stock many investors are watching right now. III is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value.
Investors will also notice that III has a PEG ratio of 0.84. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. III's PEG compares to its industry's average PEG of 1.20. III's PEG has been as high as 1.20 and as low as 0.59, with a median of 0.79, all within the past year.
Another valuation metric that we should highlight is III's P/B ratio of 2.76. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. III's current P/B looks attractive when compared to its industry's average P/B of 5.36. Within the past 52 weeks, III's P/B has been as high as 2.84 and as low as 1.52, with a median of 1.86.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. III has a P/S ratio of 1. This compares to its industry's average P/S of 1.34.
Value investors will likely look at more than just these metrics, but the above data helps show that Information Services Group is likely undervalued currently. And when considering the strength of its earnings outlook, III sticks out as one of the market's strongest value stocks.
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