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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system’s “Value” category. Stocks with both “A” grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is SMART Global Holdings, Inc. (SGH). SGH is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 7.30 right now. For comparison, its industry sports an average P/E of 20.82. Over the last 12 months, SGH’s Forward P/E has been as high as 14.73 and as low as 7.05, with a median of 9.62.
Another notable valuation metric for SGH is its P/B ratio of 3.65. Investors use the P/B ratio to look at a stock’s market value versus 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 10.67. Over the past 12 months, SGH’s P/B has been as high as 5.42 and as low as 2.04, with a median of 3.87.
Finally, investors should note that SGH has a P/CF ratio of 15.61. 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 company’s current P/CF looks solid when compared to its industry’s average P/CF of 29.10. Over the past 52 weeks, SGH’s P/CF has been as high as 25.67 and as low as 12.80, with a median of 17.66.
Value investors will likely look at more than just these metrics, but the above data helps show that SMART Global Holdings, Inc. Is likely undervalued currently. And when considering the strength of its earnings outlook, SGH sticks out at as one of the market’s strongest value stocks.
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