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.
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 company to watch right now is Chatham Lodging Trust REIT (CLDT). CLDT is currently sporting a Zacks Rank #1 (Strong Buy) and an A for Value. The stock has a Forward P/E ratio of 6.77. This compares to its industry's average Forward P/E of 16.67. Over the last 12 months, CLDT's Forward P/E has been as high as 8.70 and as low as 5.56, with a median of 7.10.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CLDT has a P/S ratio of 1.39. This compares to its industry's average P/S of 4.08.
If you're looking for another solid REIT and Equity Trust - Other value stock, take a look at Douglas Emmett (DEI). DEI is a Zacks Rank of #2 (Buy) stock with a Value score of A.
Additionally, Douglas Emmett has a P/B ratio of 0.75 while its industry's price-to-book ratio sits at 1.94. For DEI, this valuation metric has been as high as 0.93, as low as 0.60, with a median of 0.76 over the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Chatham Lodging Trust REIT and Douglas Emmett are likely undervalued currently. And when considering the strength of its earnings outlook, CLDT and DEI sticks out as one of the market's strongest value stocks.
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Chatham Lodging Trust (REIT) (CLDT): Free Stock Analysis Report
Douglas Emmett, Inc. (DEI): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).