The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 to watch right now is inTest (INTT). INTT 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 8.95, while its industry has an average P/E of 19.11. Over the past year, INTT's Forward P/E has been as high as 13.45 and as low as 7.50, with a median of 9.82.
Investors should also note that INTT holds a PEG ratio of 0.90. 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 industry currently sports an average PEG of 1.44. Over the last 12 months, INTT's PEG has been as high as 1.35 and as low as 0.75, with a median of 0.98.
Another valuation metric that we should highlight is INTT's P/B ratio of 1.69. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 3.60. Over the past year, INTT's P/B has been as high as 2.47 and as low as 1.55, with a median of 1.97.
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. INTT has a P/S ratio of 0.9. This compares to its industry's average P/S of 1.28.
Finally, we should also recognize that INTT has a P/CF ratio of 40.33. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 101.95. INTT's P/CF has been as high as 47.90 and as low as 10, with a median of 26.14, all within the past year.
These are only a few of the key metrics included in inTest's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, INTT looks like an impressive value stock at the moment.
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