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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 ARMOUR Residential REIT (ARR). ARR is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 4.59. This compares to its industry's average Forward P/E of 6.96. Over the past year, ARR's Forward P/E has been as high as 5.33 and as low as 3.86, with a median of 4.75.
Investors should also recognize that ARR has a P/B ratio of 0.81. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. ARR's current P/B looks attractive when compared to its industry's average P/B of 0.87. Within the past 52 weeks, ARR's P/B has been as high as 0.93 and as low as 0.67, with a median of 0.80.
These are only a few of the key metrics included in ARMOUR Residential REIT'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, ARR looks like an impressive value stock at the moment.
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ARMOUR Residential REIT, Inc. (ARR): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).