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.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 Barnes & Noble Education (BNED). BNED is currently sporting a Zacks Rank #2 (Buy) and an A for Value.
Investors should also recognize that BNED has a P/B ratio of 1.12. The P/B is a method of comparing a stock's market value to 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 2.81. Over the past year, BNED's P/B has been as high as 2.05 and as low as 0.89, with a median of 1.33.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. BNED has a P/S ratio of 0.21. This compares to its industry's average P/S of 0.6.
Value investors will likely look at more than just these metrics, but the above data helps show that Barnes & Noble Education is likely undervalued currently. And when considering the strength of its earnings outlook, BNED sticks out as one of the market's strongest value stocks.
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
Barnes & Noble Education, Inc (BNED): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).