Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Neverthe…
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August 30, 2021 3 min read
This story originally appeared on Zacks
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 stock to keep an eye on is Signet (SIG). SIG is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
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. SIG has a P/S ratio of 0.7. This compares to its industry’s average P/S of 1.05.
Finally, investors will want to recognize that SIG has a P/CF ratio of 9.47. This metric focuses on a firm’s operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock’s P/CF looks attractive against its industry’s average P/CF of 9.99. SIG’s P/CF has been as high as 26.17 and as low as -13.28, with a median of 7.73, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Signet is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SIG feels like a great value stock at the moment.
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