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, 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.
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 company to watch right now is LATAM (LTM). LTM is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
Investors should also recognize that LTM has a P/B ratio of 1.88. Investors use the P/B ratio to look at a stock's market value versus 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 2.54. LTM's P/B has been as high as 2.28 and as low as 1.39, with a median of 1.72, over the past year.
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. LTM has a P/S ratio of 0.65. This compares to its industry's average P/S of 0.69.
Value investors will likely look at more than just these metrics, but the above data helps show that LATAM is likely undervalued currently. And when considering the strength of its earnings outlook, LTM sticks out at as one of the market's strongest value stocks.
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LATAM Airlines Group S.A. (LTM) : Free Stock Analysis Report
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