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.
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 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.
PG&E (PCG) is a stock many investors are watching right now. PCG is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
Investors should also note that PCG holds a PEG ratio of 2.03. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. PCG's PEG compares to its industry's average PEG of 2.49. Within the past year, PCG's PEG has been as high as 3.54 and as low as 0.46, with a median of 2.35.
Investors should also recognize that PCG has a P/B ratio of 0.73. 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 1.72. Over the past year, PCG's P/B has been as high as 1.29 and as low as 0.26, with a median of 0.96.
Value investors will likely look at more than just these metrics, but the above data helps show that PG&E is likely undervalued currently. And when considering the strength of its earnings outlook, PCG sticks out at as one of the market's strongest value stocks.
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