While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 Magna International (MGA). MGA is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 8.47 right now. For comparison, its industry sports an average P/E of 16.92. Over the past year, MGA's Forward P/E has been as high as 8.47 and as low as 5.65, with a median of 6.79.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. MGA has a P/S ratio of 0.4. This compares to its industry's average P/S of 0.66.
These are just a handful of the figures considered in Magna International'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 MGA is an impressive value stock right now.
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Magna International Inc. (MGA): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).