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.
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.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company value investors might notice is Schnitzer Steel (SCHN). SCHN is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
Investors should also recognize that SCHN has a P/B ratio of 0.92. 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. This company's current P/B looks solid when compared to its industry's average P/B of 1.14. Within the past 52 weeks, SCHN's P/B has been as high as 1.62 and as low as 0.85, with a median of 1.07.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. SCHN has a P/S ratio of 0.28. This compares to its industry's average P/S of 0.31.
These are just a handful of the figures considered in Schnitzer Steel's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that SCHN is an impressive value stock right now.
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Schnitzer Steel Industries, Inc. (SCHN) : Free Stock Analysis Report
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