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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader 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.
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 value investors might notice is Academy Sports and Outdoors (ASO). ASO is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 7.84, which compares to its industry's average of 16.48. Over the past year, ASO's Forward P/E has been as high as 9.30 and as low as 5.45, with a median of 7.77.
We should also highlight that ASO has a P/B ratio of 1.54. 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 3.07. Over the past year, ASO's P/B has been as high as 2.32 and as low as 1.18, with a median of 1.73.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. ASO has a P/S ratio of 0.48. This compares to its industry's average P/S of 0.86.
OneWater Marine (ONEW) may be another strong Leisure and Recreation Products stock to add to your shortlist. ONEW is a Zacks Rank of #2 (Buy) stock with a Value grade of A.
Furthermore, OneWater Marine holds a P/B ratio of 0.65 and its industry's price-to-book ratio is 3.07. ONEW's P/B has been as high as 1.06, as low as 0.52, with a median of 0.70 over the past 12 months.
These are just a handful of the figures considered in Academy Sports and Outdoors and OneWater Marine's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that ASO and ONEW is an impressive value stock right now.
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Academy Sports and Outdoors, Inc. (ASO): Free Stock Analysis Report
OneWater Marine Inc. (ONEW): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).