Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 to watch right now is ASE Technology Hldg (ASX). ASX is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 11.46. This compares to its industry's average Forward P/E of 11.57. Over the last 12 months, ASX's Forward P/E has been as high as 16.76 and as low as 9.34, with a median of 12.23.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. ASX has a P/S ratio of 0.74. This compares to its industry's average P/S of 2.15.
Value investors will likely look at more than just these metrics, but the above data helps show that ASE Technology Hldg is likely undervalued currently. And when considering the strength of its earnings outlook, ASX sticks out at as one of the market's strongest value stocks.
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