Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
Pinnacle Financial Partners (PNFP) is a stock many investors are watching right now. PNFP is currently holding a Zacks Rank #2 (Buy) and a Value grade of A.
Another valuation metric that we should highlight is PNFP's P/B ratio of 1.16. The P/B is a method of comparing a stock's market value to 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 1.65. PNFP's P/B has been as high as 1.64 and as low as 1.04, with a median of 1.32, over the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. PNFP has a P/S ratio of 1.95. This compares to its industry's average P/S of 2.19.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Pinnacle Financial Partners is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, PNFP feels like a great value stock at the moment.
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Pinnacle Financial Partners, Inc. (PNFP): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).