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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is Old Republic International (ORI). ORI 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 10.06, while its industry has an average P/E of 10.46. ORI's Forward P/E has been as high as 11.95 and as low as 8.86, with a median of 10.69, all within the past year.
Another valuation metric that we should highlight is ORI's P/B ratio of 1.12. 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 1.57. ORI's P/B has been as high as 1.25 and as low as 0.73, with a median of 0.97, over the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. ORI has a P/S ratio of 0.86. This compares to its industry's average P/S of 0.98.
Finally, our model also underscores that ORI has a P/CF ratio of 4.75. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 13.51. Within the past 12 months, ORI's P/CF has been as high as 18.80 and as low as 3.92, with a median of 10.67.
Value investors will likely look at more than just these metrics, but the above data helps show that Old Republic International is likely undervalued currently. And when considering the strength of its earnings outlook, ORI sticks out at as one of the market's strongest value stocks.
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Old Republic International Corporation (ORI) : Free Stock Analysis Report
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