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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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader 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 inTest (INTT). INTT is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.
INTT is also sporting a PEG ratio of 0.71. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. INTT's industry has an average PEG of 1.77 right now. Over the last 12 months, INTT's PEG has been as high as 1.21 and as low as 0.57, with a median of 0.91.
Investors should also recognize that INTT has a P/B ratio of 1.73. The P/B ratio pits a stock's market value against 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 4.54. Within the past 52 weeks, INTT's P/B has been as high as 2.29 and as low as 1.32, with a median of 1.83.
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 0.99. This compares to its industry's average P/S of 1.06.
Finally, investors will want to recognize that INTT has a P/CF ratio of 45.88. 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 stock's P/CF looks attractive against its industry's average P/CF of 46.38. INTT's P/CF has been as high as 50.41 and as low as 16.98, with a median of 41.75, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that inTest is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, INTT feels like a great value stock at the moment.
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