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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
Hannover Ruck (HVRRY) is a stock many investors are watching right now. HVRRY is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 10.91 right now. For comparison, its industry sports an average P/E of 20.34. Over the last 12 months, HVRRY's Forward P/E has been as high as 16.35 and as low as 9.48, with a median of 11.55.
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. HVRRY has a P/S ratio of 0.61. This compares to its industry's average P/S of 1.45.
Finally, investors will want to recognize that HVRRY has a P/CF ratio of 15.12. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. HVRRY's current P/CF looks attractive when compared to its industry's average P/CF of 20.68. Over the past year, HVRRY's P/CF has been as high as 15.63 and as low as 11.40, with a median of 13.71.
Value investors will likely look at more than just these metrics, but the above data helps show that Hannover Ruck is likely undervalued currently. And when considering the strength of its earnings outlook, HVRRY sticks out at as one of the market's strongest value stocks.
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