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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 to watch right now is AbbVie (ABBV). ABBV is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 8.09, while its industry has an average P/E of 14.24. Over the last 12 months, ABBV's Forward P/E has been as high as 11.61 and as low as 6.78, with a median of 9.05.
Investors will also notice that ABBV has a PEG ratio of 1.47. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ABBV's industry currently sports an average PEG of 1.83. Over the past 52 weeks, ABBV's PEG has been as high as 1.69 and as low as 0.67, with a median of 1.21.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. ABBV has a P/S ratio of 3.39. This compares to its industry's average P/S of 3.73.
These are just a handful of the figures considered in AbbVie'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 ABBV is an impressive value stock right now.
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AbbVie Inc. (ABBV) : Free Stock Analysis Report
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