Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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.
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 stock to keep an eye on is Hewlett Packard Enterprise (HPE). HPE is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 8.95 right now. For comparison, its industry sports an average P/E of 10.14. Over the last 12 months, HPE's Forward P/E has been as high as 10.31 and as low as 7.23, with a median of 8.80.
Investors will also notice that HPE has a PEG ratio of 1.27. 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. HPE's industry currently sports an average PEG of 1.55. Within the past year, HPE's PEG has been as high as 1.93 and as low as 0.83, with a median of 1.32.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. HPE has a P/S ratio of 0.72. This compares to its industry's average P/S of 1.98.
Finally, investors should note that HPE has a P/CF ratio of 8.90. 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. This stock's P/CF looks attractive against its industry's average P/CF of 10.06. Within the past 12 months, HPE's P/CF has been as high as 8.90 and as low as 3.84, with a median of 6.84.
These are only a few of the key metrics included in Hewlett Packard Enterprise's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, HPE looks like an impressive value stock at the moment.
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