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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is Sasol (SSL). SSL is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 3.51, which compares to its industry's average of 10.39. Over the past 52 weeks, SSL's Forward P/E has been as high as 3.78 and as low as 1.58, with a median of 2.39.
SSL is also sporting a PEG ratio of 0.35. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. SSL's PEG compares to its industry's average PEG of 0.91. SSL's PEG has been as high as 0.38 and as low as 0.10, with a median of 0.15, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Sasol is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SSL feels like a great value stock at the moment.
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Sasol Ltd. (SSL): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).