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.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is Scorpio Tankers (STNG). STNG is currently holding a Zacks Rank #2 (Buy) and a Value grade of A.
We should also highlight that STNG has a P/B ratio of 1. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. STNG's current P/B looks attractive when compared to its industry's average P/B of 2.31. Over the past year, STNG's P/B has been as high as 1.32 and as low as 0.54, with a median of 0.80.
Finally, investors will want to recognize that STNG has a P/CF ratio of 5.16. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. STNG's current P/CF looks attractive when compared to its industry's average P/CF of 7.29. STNG's P/CF has been as high as 5.34 and as low as 2.12, with a median of 2.85, 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 Scorpio Tankers is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, STNG feels like a great value stock at the moment.
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Scorpio Tankers Inc. (STNG): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).