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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.
One stock to keep an eye on is inTest (INTT). INTT is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 10.33. This compares to its industry's average Forward P/E of 22.50. Over the past year, INTT's Forward P/E has been as high as 14.02 and as low as 7.50, with a median of 10.64.
We also note that INTT holds a PEG ratio of 1.03. 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. INTT's PEG compares to its industry's average PEG of 1.87. Within the past year, INTT's PEG has been as high as 1.40 and as low as 0.75, with a median of 1.06.
Investors should also recognize that INTT has a P/B ratio of 2.04. The P/B is a method of comparing a stock's market value to 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 4.14. INTT's P/B has been as high as 2.47 and as low as 1.55, with a median of 2.03, over the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that inTest is likely undervalued currently. And when considering the strength of its earnings outlook, INTT sticks out at as one of the market's strongest value stocks.
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