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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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.
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.
GP Strategies (GPX) is a stock many investors are watching right now. GPX is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 12.94, while its industry has an average P/E of 29.69. Over the past 52 weeks, GPX's Forward P/E has been as high as 30.69 and as low as 12.94, with a median of 17.05.
Investors will also notice that GPX has a PEG ratio of 0.86. 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. GPX's industry has an average PEG of 1.10 right now. Over the past 52 weeks, GPX's PEG has been as high as 2.05 and as low as 0.86, with a median of 1.14.
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. GPX has a P/S ratio of 0.56. This compares to its industry's average P/S of 1.04.
These are just a handful of the figures considered in GP Strategies'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 GPX is an impressive value stock right now.
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