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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is Renewable Energy Group (REGI). REGI is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
Investors should also recognize that REGI has a P/B ratio of 0.79. 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. REGI's current P/B looks attractive when compared to its industry's average P/B of 2.28. Over the past 12 months, REGI's P/B has been as high as 1.68 and as low as 0.59, with a median of 0.91.
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. REGI has a P/S ratio of 0.37. This compares to its industry's average P/S of 0.73.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Renewable Energy Group is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, REGI feels like a great value stock at the moment.
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Renewable Energy Group, Inc. (REGI) : Free Stock Analysis Report
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