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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.
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.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is Innoviva (INVA). INVA is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 5.98. This compares to its industry's average Forward P/E of 14.59. Over the last 12 months, INVA's Forward P/E has been as high as 12 and as low as 5.73, with a median of 9.42.
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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. INVA has a P/S ratio of 3.41. This compares to its industry's average P/S of 4.25.
Finally, we should also recognize that INVA has a P/CF ratio of 5.04. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. INVA's P/CF compares to its industry's average P/CF of 15.31. INVA's P/CF has been as high as 9.79 and as low as 3.70, with a median of 6.38, all within the past year.
These are just a handful of the figures considered in Innoviva'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 INVA is an impressive value stock right now.
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Innoviva, Inc. (INVA) : Free Stock Analysis Report
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