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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is Assurant (AIZ). AIZ is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value.
Investors should also recognize that AIZ has a P/B ratio of 1.94. 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 2.95. Over the past 12 months, AIZ's P/B has been as high as 2.25 and as low as 1.71, with a median of 1.98.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. AIZ has a P/S ratio of 1.05. This compares to its industry's average P/S of 1.06.
Value investors will likely look at more than just these metrics, but the above data helps show that Assurant is likely undervalued currently. And when considering the strength of its earnings outlook, AIZ sticks out as one of the market's strongest value stocks.
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Assurant, Inc. (AIZ): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).