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, 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.
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 company to watch right now is Genworth Financial (GNW). GNW is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value.
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. GNW has a P/S ratio of 0.53. This compares to its industry's average P/S of 0.76.
Finally, our model also underscores that GNW has a P/CF ratio of 12.32. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. GNW's current P/CF looks attractive when compared to its industry's average P/CF of 19.97. GNW's P/CF has been as high as 17.53 and as low as 6.47, with a median of 10.08, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Genworth Financial is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, GNW feels like a great value stock at the moment.
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Genworth Financial, Inc. (GNW): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).