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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. 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.
One company value investors might notice is YPF Sociedad Anonima (YPF). YPF is currently holding a Zacks Rank #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 8.15, which compares to its industry's average of 11.65. YPF's Forward P/E has been as high as 12.74 and as low as 4.36, with a median of 8.07, all within the past year.
YPF is also sporting a PEG ratio of 0.20. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. YPF's industry currently sports an average PEG of 0.49. YPF's PEG has been as high as 0.31 and as low as 0.10, with a median of 0.19, all within the past year.
Investors should also recognize that YPF has a P/B ratio of 0.79. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 2.06. Over the past year, YPF's P/B has been as high as 1.53 and as low as 0.69, with a median of 1.11.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. YPF has a P/S ratio of 0.87. This compares to its industry's average P/S of 0.97.
Value investors will likely look at more than just these metrics, but the above data helps show that YPF Sociedad Anonima is likely undervalued currently. And when considering the strength of its earnings outlook, YPF sticks out as one of the market's strongest value stocks.
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YPF Sociedad Anonima (YPF): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).