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.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 value investors might notice is International Consolidated Airlines Group (ICAGY). ICAGY is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 6.18, while its industry has an average P/E of 8.49. ICAGY's Forward P/E has been as high as 26.44 and as low as 6.05, with a median of 10.07, all within the past year.
Investors should also note that ICAGY holds a PEG ratio of 0.13. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ICAGY's PEG compares to its industry's average PEG of 0.28. Over the past 52 weeks, ICAGY's PEG has been as high as 0.13 and as low as 0.13, with a median of 0.13.
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. ICAGY has a P/S ratio of 0.18. This compares to its industry's average P/S of 0.5.
Value investors will likely look at more than just these metrics, but the above data helps show that International Consolidated Airlines Group is likely undervalued currently. And when considering the strength of its earnings outlook, ICAGY sticks out at as one of the market's strongest value stocks.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report