Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 WhiteHorse Finance (WHF). WHF is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 7.28 right now. For comparison, its industry sports an average P/E of 8.95. WHF's Forward P/E has been as high as 8.04 and as low as 5.83, with a median of 7.40, all within the past year.
Another notable valuation metric for WHF is its P/B ratio of 0.68. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. WHF's current P/B looks attractive when compared to its industry's average P/B of 0.81. WHF's P/B has been as high as 0.95 and as low as 0.68, with a median of 0.79, over the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. WHF has a P/S ratio of 2.32. This compares to its industry's average P/S of 3.33.
These are only a few of the key metrics included in WhiteHorse Finance'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, WHF looks like an impressive value stock at the moment.
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WhiteHorse Finance, Inc. (WHF): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).