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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 stock to keep an eye on is ZTO Express Cayman (ZTO). ZTO is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 11.56, which compares to its industry's average of 14.33. ZTO's Forward P/E has been as high as 14.00 and as low as 9.23, with a median of 10.72, all within the past year.
We should also highlight that ZTO has a P/B ratio of 1.23. Investors use the P/B ratio to look at a stock's market value versus 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 3.47. ZTO's P/B has been as high as 1.87 and as low as 1.14, with a median of 1.32, over the past year.
Finally, we should also recognize that ZTO has a P/CF ratio of 9.63. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. ZTO's P/CF compares to its industry's average P/CF of 14.43. Within the past 12 months, ZTO's P/CF has been as high as 13.96 and as low as 8.08, with a median of 9.89.
These figures are just a handful of the metrics value investors tend to look at, but they help show that ZTO Express Cayman is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ZTO feels like a great value stock at the moment.
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ZTO Express (Cayman) Inc. (ZTO): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).