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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 company value investors might notice is inTest (INTT). INTT is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock holds a P/E ratio of 5.98, while its industry has an average P/E of 17.28. Over the last 12 months, INTT's Forward P/E has been as high as 13.14 and as low as 5.98, with a median of 9.36.
We also note that INTT holds a PEG ratio of 0.60. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. INTT's PEG compares to its industry's average PEG of 1.30. Within the past year, INTT's PEG has been as high as 1.31 and as low as 0.60, with a median of 0.94.
Investors should also recognize that INTT has a P/B ratio of 1.39. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 3.34. Over the past year, INTT's P/B has been as high as 2.47 and as low as 1.39, with a median of 1.89.
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. INTT has a P/S ratio of 0.72. This compares to its industry's average P/S of 1.06.
These are just a handful of the figures considered in inTest'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 INTT is an impressive value stock right now.
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