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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is Belden (BDC). BDC is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
Investors should also recognize that BDC has a P/B ratio of 2.33. 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 2.34. Over the past year, BDC's P/B has been as high as 3.23 and as low as 2.26, with a median of 2.71.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. BDC has a P/S ratio of 0.88. This compares to its industry's average P/S of 0.89.
If you're looking for another solid Wire and Cable Products value stock, take a look at Encore Wire (WIRE). WIRE is a # 1 (Strong Buy) stock with a Value score of A.
Additionally, Encore Wire has a P/B ratio of 1.47 while its industry's price-to-book ratio sits at 2.34. For WIRE, this valuation metric has been as high as 2.48, as low as 1.30, with a median of 1.73 over the past year.
These are just a handful of the figures considered in Belden and Encore Wire'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 BDC and WIRE is an impressive value stock right now.