The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 to watch right now is Carter Bankshares (CARE). CARE is currently holding a Zacks Rank #2 (Buy) and a Value grade of A.
Investors should also recognize that CARE has a P/B ratio of 1.13. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. CARE's current P/B looks attractive when compared to its industry's average P/B of 1.16. Over the past 12 months, CARE's P/B has been as high as 1.21 and as low as 0.80, with a median of 1.04.
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. CARE has a P/S ratio of 1.81. This compares to its industry's average P/S of 2.
Finally, we should also recognize that CARE has a P/CF ratio of 10.62. 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. CARE's P/CF compares to its industry's average P/CF of 11.49. Over the past year, CARE's P/CF has been as high as 17.16 and as low as 8.21, with a median of 10.66.
Value investors will likely look at more than just these metrics, but the above data helps show that Carter Bankshares is likely undervalued currently. And when considering the strength of its earnings outlook, CARE sticks out as one of the market's strongest value stocks.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention.
See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Carter Bankshares, Inc. (CARE): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).