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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.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company to watch right now is Griffon (GFF). GFF is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 14.22, which compares to its industry's average of 29.95. Over the past year, GFF's Forward P/E has been as high as 24.03 and as low as 6.43, with a median of 13.90.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. GFF has a P/S ratio of 0.56. This compares to its industry's average P/S of 1.38.
Finally, we should also recognize that GFF has a P/CF ratio of 9.63. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 30.84. Over the past 52 weeks, GFF's P/CF has been as high as 9.97 and as low as 3.93, with a median of 7.90.
Value investors will likely look at more than just these metrics, but the above data helps show that Griffon is likely undervalued currently. And when considering the strength of its earnings outlook, GFF sticks out at as one of the market's strongest value stocks.
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Griffon Corporation (GFF) : Free Stock Analysis Report
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