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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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
Axalta Coating Systems (AXTA) is a stock many investors are watching right now. AXTA is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 11.57. This compares to its industry's average Forward P/E of 12.24. Over the past year, AXTA's Forward P/E has been as high as 18.88 and as low as 11.46, with a median of 13.85.
AXTA is also sporting a PEG ratio of 0.70. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. AXTA's industry currently sports an average PEG of 1.25. Within the past year, AXTA's PEG has been as high as 0.87 and as low as 0.52, with a median of 0.67.
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. AXTA has a P/S ratio of 1.08. This compares to its industry's average P/S of 1.52.
Finally, our model also underscores that AXTA has a P/CF ratio of 8.46. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 18.77. Over the past year, AXTA's P/CF has been as high as 17.78 and as low as 8.31, with a median of 11.28.
Value investors will likely look at more than just these metrics, but the above data helps show that Axalta Coating Systems is likely undervalued currently. And when considering the strength of its earnings outlook, AXTA sticks out at as one of the market's strongest value stocks.
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Axalta Coating Systems Ltd. (AXTA) : Free Stock Analysis Report
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