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.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
One stock to keep an eye on is Newell Brands (NWL). NWL is currently sporting a Zacks Rank #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 8.03, which compares to its industry's average of 18.75. NWL's Forward P/E has been as high as 15.23 and as low as 5.93, with a median of 8.85, 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 preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. NWL has a P/S ratio of 0.36. This compares to its industry's average P/S of 0.86.
Finally, investors will want to recognize that NWL has a P/CF ratio of 5.58. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 13.22. Over the past 52 weeks, NWL's P/CF has been as high as 11.38 and as low as 4.42, with a median of 6.09.
Value investors will likely look at more than just these metrics, but the above data helps show that Newell Brands is likely undervalued currently. And when considering the strength of its earnings outlook, NWL sticks out as one of the market's strongest value stocks.
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Newell Brands Inc. (NWL): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).