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, 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.
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 company value investors might notice is Equinor (EQNR). EQNR 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 8.77, which compares to its industry’s average of 10.40. Over the last 12 months, EQNR’s Forward P/E has been as high as 24.85 and as low as 8.77, with a median of 12.68.
Investors will also notice that EQNR has a PEG ratio of 0.18. 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. EQNR’s industry has an average PEG of 0.35 right now. Within the past year, EQNR’s PEG has been as high as 5.03 and as low as 0.18, with a median of 2.20.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock’s price with the company’s 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. EQNR has a P/S ratio of 1.4. This compares to its industry’s average P/S of 3.77.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Equinor is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, EQNR feels like a great value stock at the moment.