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, 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 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.
One company to watch right now is Commercial Metals (CMC). CMC is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 10.98, while its industry has an average P/E of 16.92. Over the past 52 weeks, CMC's Forward P/E has been as high as 11.66 and as low as 5.05, with a median of 9.04.
We also note that CMC holds a PEG ratio of 2.24. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. CMC's PEG compares to its industry's average PEG of 3.06. CMC's PEG has been as high as 5.97 and as low as 1.33, with a median of 2.38, all within the past year.
Finally, our model also underscores that CMC has a P/CF ratio of 5.71. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. CMC's current P/CF looks attractive when compared to its industry's average P/CF of 8.71. Within the past 12 months, CMC's P/CF has been as high as 9.21 and as low as 3.28, with a median of 7.34.
These are just a handful of the figures considered in Commercial Metals'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 CMC is an impressive value stock right now.
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