Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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 company value investors might notice is Worthington Industries (WOR). WOR is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 12.95, which compares to its industry's average of 13.97. WOR's Forward P/E has been as high as 15.34 and as low as 7.13, with a median of 11.12, all within the past year.
Another valuation metric that we should highlight is WOR's P/B ratio of 1.66. 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. WOR's current P/B looks attractive when compared to its industry's average P/B of 4.17. Within the past 52 weeks, WOR's P/B has been as high as 1.88 and as low as 1.15, with a median of 1.59.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. WOR has a P/S ratio of 0.56. This compares to its industry's average P/S of 0.6.
Finally, investors should note that WOR has a P/CF ratio of 8.88. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 9.21. WOR's P/CF has been as high as 10.03 and as low as 4.10, with a median of 6.66, all within the past year.
These are only a few of the key metrics included in Worthington Industries'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, WOR looks like an impressive value stock at the moment.
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