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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 company to watch right now is Progressive (PGR). PGR is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 12.65. This compares to its industry's average Forward P/E of 27.26. PGR's Forward P/E has been as high as 15.53 and as low as 12.32, with a median of 13.95, all within the past year.
Investors should also note that PGR holds a PEG ratio of 1.73. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. PGR's PEG compares to its industry's average PEG of 3.31. Over the past 52 weeks, PGR's PEG has been as high as 2.12 and as low as 1.68, with a median of 1.90.
Finally, we should also recognize that PGR has a P/CF ratio of 11.39. 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. PGR's current P/CF looks attractive when compared to its industry's average P/CF of 15.10. Within the past 12 months, PGR's P/CF has been as high as 14.95 and as low as 9.14, with a median of 12.31.
Value investors will likely look at more than just these metrics, but the above data helps show that Progressive is likely undervalued currently. And when considering the strength of its earnings outlook, PGR sticks out at as one of the market's strongest value stocks.
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