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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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 Iochpe-Maxion (IOCJY). IOCJY is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 10.26. This compares to its industry's average Forward P/E of 11.81. IOCJY's Forward P/E has been as high as 10.79 and as low as 8.79, with a median of 9.39, all within the past year.
Investors should also recognize that IOCJY has a P/B ratio of 0.99. 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 stock's P/B looks attractive against its industry's average P/B of 2.55. Over the past year, IOCJY's P/B has been as high as 1.14 and as low as 0.79, with a median of 0.95.
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. IOCJY has a P/S ratio of 0.32. This compares to its industry's average P/S of 0.45.
Finally, investors should note that IOCJY has a P/CF ratio of 6.17. 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 6.39. Over the past year, IOCJY's P/CF has been as high as 8.58 and as low as 4.91, with a median of 6.10.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Iochpe-Maxion is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, IOCJY feels like a great value stock at the moment.
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