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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
Helen of Troy (HELE) is a stock many investors are watching right now. HELE is currently holding a Zacks Rank #2 (Buy) and a Value grade of A.
We also note that HELE holds a PEG ratio of 0.86. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. HELE's industry has an average PEG of 1.30 right now. HELE's PEG has been as high as 1.73 and as low as 0.72, with a median of 1.10, all within the past year.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. HELE has a P/S ratio of 0.38. This compares to its industry's average P/S of 1.13.
These are only a few of the key metrics included in Helen of Troy's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, HELE looks like an impressive value stock at the moment.
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Helen of Troy Limited (HELE): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).