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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 Teradata (TDC). TDC is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 9.74, while its industry has an average P/E of 12.92. Over the past 52 weeks, TDC's Forward P/E has been as high as 14.06 and as low as 8.41, with a median of 10.21.
Another notable valuation metric for TDC is its P/B ratio of 11.81. 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. This company's current P/B looks solid when compared to its industry's average P/B of 16.10. TDC's P/B has been as high as 38.89 and as low as 10.80, with a median of 16.48, over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Teradata is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, TDC feels like a great value stock at the moment.
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Teradata Corporation (TDC): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).