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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
EmbraerEmpresa Brasileira de Aeronautica (ERJ) is a stock many investors are watching right now. ERJ is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock holds a P/E ratio of 14.30, while its industry has an average P/E of 19.10. Over the past year, ERJ's Forward P/E has been as high as 116.70 and as low as -49.52, with a median of 41.97.
ERJ is also sporting a PEG ratio of 0.84. 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. ERJ's PEG compares to its industry's average PEG of 1.40. Over the last 12 months, ERJ's PEG has been as high as 6.86 and as low as -2.91, with a median of 2.47.
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. ERJ has a P/S ratio of 0.5. This compares to its industry's average P/S of 1.21.
These are just a handful of the figures considered in EmbraerEmpresa Brasileira de Aeronautica'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 ERJ is an impressive value stock right now.
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EmbraerEmpresa Brasileira de Aeronautica (ERJ) : Free Stock Analysis Report
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