While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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.
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 KNOT Offshore Partners (KNOP). KNOP is currently sporting a Zacks Rank #2 (Buy) and an A for Value.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. KNOP has a P/S ratio of 1.02. This compares to its industry's average P/S of 2.06.
These are just a handful of the figures considered in KNOT Offshore Partners's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that KNOP is an impressive value stock right now.
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KNOT Offshore Partners LP (KNOP): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).