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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.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is Innoviva (INVA). INVA is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 9.52, which compares to its industry's average of 16.18. Over the last 12 months, INVA's Forward P/E has been as high as 12 and as low as 5.73, with a median of 9.56.
Investors should also recognize that INVA has a P/B ratio of 3.85. Investors use the P/B ratio to look at a stock's market value versus 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 6.84. Over the past year, INVA's P/B has been as high as 7.57 and as low as 2.40, with a median of 4.60.
Finally, our model also underscores that INVA has a P/CF ratio of 8.36. 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. INVA's current P/CF looks attractive when compared to its industry's average P/CF of 16.51. Over the past year, INVA's P/CF has been as high as 9.79 and as low as 2.83, with a median of 3.82.
Value investors will likely look at more than just these metrics, but the above data helps show that Innoviva is likely undervalued currently. And when considering the strength of its earnings outlook, INVA sticks out at as one of the market's strongest value stocks.
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Innoviva, Inc. (INVA) : Free Stock Analysis Report
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