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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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 Old Republic International (ORI). ORI is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A.
Another notable valuation metric for ORI is its P/B ratio of 0.99. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. ORI's current P/B looks attractive when compared to its industry's average P/B of 1.02. ORI's P/B has been as high as 1.10 and as low as 0.62, with a median of 0.90, 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. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. ORI has a P/S ratio of 0.9. This compares to its industry's average P/S of 0.98.
Value investors will likely look at more than just these metrics, but the above data helps show that Old Republic International is likely undervalued currently. And when considering the strength of its earnings outlook, ORI sticks out at as one of the market's strongest value stocks.
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Old Republic International Corporation (ORI) : Free Stock Analysis Report
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