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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
Acco Brands (ACCO) is a stock many investors are watching right now. ACCO is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 7.87. This compares to its industry's average Forward P/E of 14.26. Over the past year, ACCO's Forward P/E has been as high as 9.59 and as low as 4.83, with a median of 6.84.
Investors will also notice that ACCO has a PEG ratio of 0.79. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ACCO's PEG compares to its industry's average PEG of 1.55. Over the last 12 months, ACCO's PEG has been as high as 0.96 and as low as 0.48, with a median of 0.68.
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. ACCO has a P/S ratio of 0.49. This compares to its industry's average P/S of 1.33.
Finally, investors should note that ACCO has a P/CF ratio of 5.94. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. ACCO's current P/CF looks attractive when compared to its industry's average P/CF of 12.23. ACCO's P/CF has been as high as 6.85 and as low as 3.05, with a median of 4.99, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Acco Brands is likely undervalued currently. And when considering the strength of its earnings outlook, ACCO sticks out at as one of the market's strongest value stocks.
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