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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
Acco Brands (ACCO) is a stock many investors are watching right now. ACCO is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 8.14. This compares to its industry's average Forward P/E of 13.78. Over the past year, ACCO's Forward P/E has been as high as 9.73 and as low as 3.02, with a median of 6.95.
Investors will also notice that ACCO has a PEG ratio of 1.16. 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. ACCO's PEG compares to its industry's average PEG of 2. ACCO's PEG has been as high as 1.39 and as low as 0.43, with a median of 0.99, all within the past year.
Another notable valuation metric for ACCO is its P/B ratio of 1.10. The P/B ratio pits a stock's market value against 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 1.56. Within the past 52 weeks, ACCO's P/B has been as high as 1.29 and as low as 0.49, with a median of 0.88.
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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. ACCO has a P/S ratio of 0.45. This compares to its industry's average P/S of 1.26.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Acco Brands is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ACCO feels like a great value stock at the moment.
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