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.
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.
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 stock to keep an eye on is Kelly Services (KELYA). KELYA is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 12.47 right now. For comparison, its industry sports an average P/E of 12.60. Over the past year, KELYA's Forward P/E has been as high as 21.62 and as low as 4.96, with a median of 12.51.
We also note that KELYA holds a PEG ratio of 1.25. 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. KELYA's industry currently sports an average PEG of 1.81. Over the past 52 weeks, KELYA's PEG has been as high as 1.71 and as low as 1.10, with a median of 1.35.
Another valuation metric that we should highlight is KELYA's P/B ratio of 0.67. The P/B ratio pits a stock's market value against 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 1.74. Over the past 12 months, KELYA's P/B has been as high as 0.77 and as low as 0.32, with a median of 0.57.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. KELYA has a P/S ratio of 0.17. This compares to its industry's average P/S of 0.5.
Finally, investors should note that KELYA has a P/CF ratio of 6.74. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 8.54. Over the past 52 weeks, KELYA's P/CF has been as high as 7.76 and as low as -13.66, with a median of 4.08.
These are just a handful of the figures considered in Kelly Services's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that KELYA is an impressive value stock right now.
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Kelly Services, Inc. (KELYA) : Free Stock Analysis Report
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