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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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.
Gentherm (THRM) is a stock many investors are watching right now. THRM is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 13.9. This compares to its industry's average Forward P/E of 18.99. THRM's Forward P/E has been as high as 15.48 and as low as 8.71, with a median of 12.42, all within the past year.
Another notable valuation metric for THRM is its P/B ratio of 1.53. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 4.26. Over the past 12 months, THRM's P/B has been as high as 2.49 and as low as 1.11, with a median of 1.59.
Value investors will likely look at more than just these metrics, but the above data helps show that Gentherm is likely undervalued currently. And when considering the strength of its earnings outlook, THRM sticks out as one of the market's strongest value stocks.
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Gentherm Inc (THRM): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).