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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 stock to keep an eye on is North American Construction Group (NOA). NOA is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 9.81. This compares to its industry's average Forward P/E of 12.91. Over the past year, NOA's Forward P/E has been as high as 9.83 and as low as 5.48, with a median of 7.45.
Another notable valuation metric for NOA is its P/B ratio of 2.02. The P/B ratio pits a stock's market value against 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 2.17. Over the past 12 months, NOA's P/B has been as high as 2.03 and as low as 1.24, with a median of 1.66.
Finally, investors should note that NOA has a P/CF ratio of 3.84. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. NOA's P/CF compares to its industry's average P/CF of 11.39. Over the past year, NOA's P/CF has been as high as 3.91 and as low as 2.20, with a median of 3.24.
Value investors will likely look at more than just these metrics, but the above data helps show that North American Construction Group is likely undervalued currently. And when considering the strength of its earnings outlook, NOA sticks out at as one of the market's strongest value stocks.
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