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.
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.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is Piedmont Realty Trust, Inc. (PDM). PDM is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 6.36, while its industry has an average P/E of 16.54. Over the last 12 months, PDM's Forward P/E has been as high as 7.42 and as low as 4.06, with a median of 5.54.
Another valuation metric that we should highlight is PDM's P/B ratio of 0.72. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.93. Within the past 52 weeks, PDM's P/B has been as high as 0.84 and as low as 0.46, with a median of 0.63.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by 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. PDM has a P/S ratio of 2.11. This compares to its industry's average P/S of 4.15.
Finally, investors will want to recognize that PDM has a P/CF ratio of 7.02. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 14.79. Within the past 12 months, PDM's P/CF has been as high as 8.83 and as low as 4.29, with a median of 6.18.
If you're looking for another solid REIT and Equity Trust - Other value stock, take a look at Vornado Realty Trust (VNO). VNO is a Zacks Rank of #2 (Buy) stock with a Value score of A.
Shares of Vornado Realty Trust are currently trading at a forward earnings multiple of 17.38 and a PEG ratio of 5.01 compared to its industry's P/E and PEG ratios of 16.54 and 1.49, respectively.
Over the past year, VNO's P/E has been as high as 21.49, as low as 14.14, with a median of 17.38; its PEG ratio has been as high as 14.58, as low as 4.60, with a median of 10.34 during the same time period.
Furthermore, Vornado Realty Trust holds a P/B ratio of 1.58 and its industry's price-to-book ratio is 1.93. VNO's P/B has been as high as 2.04, as low as 1.36, with a median of 1.75 over the past 12 months.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Piedmont Realty Trust, Inc. and Vornado Realty Trust are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, PDM and VNO feels like a great value stock at the moment.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Piedmont Realty Trust, Inc. (PDM): Free Stock Analysis Report
Vornado Realty Trust (VNO): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).