The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 stock to keep an eye on is ZTO Express Cayman (ZTO). ZTO is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 11.56. This compares to its industry's average Forward P/E of 16.41. Over the past year, ZTO's Forward P/E has been as high as 14.00 and as low as 9.23, with a median of 10.72.
Another notable valuation metric for ZTO is its P/B ratio of 1.23. 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 company's current P/B looks solid when compared to its industry's average P/B of 3.46. Over the past 12 months, ZTO's P/B has been as high as 1.87 and as low as 1.14, with a median of 1.32.
Finally, our model also underscores that ZTO has a P/CF ratio of 9.63. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 16.12. Over the past 52 weeks, ZTO's P/CF has been as high as 13.96 and as low as 8.08, with a median of 9.89.
These figures are just a handful of the metrics value investors tend to look at, but they help show that ZTO Express Cayman is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ZTO feels like a great value stock at the moment.
Free Report: Profiting from the 2nd Wave of AI Explosion
The next phase of the AI explosion is poised to create significant wealth for investors, especially those who get in early. It will add literally trillion of dollars to the economy and revolutionize nearly every part of our lives.
Investors who bought shares like Nvidia at the right time have had a shot at huge gains.
But the rocket ride in the "first wave" of AI stocks may soon come to an end. The sharp upward trajectory of these stocks will begin to level off, leaving exponential growth to a new wave of cutting-edge companies.
Zacks' AI Boom 2.0: The Second Wave report reveals 4 under-the-radar companies that may soon be shining stars of AI’s next leap forward.
Access AI Boom 2.0 now, absolutely free >>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
ZTO Express (Cayman) Inc. (ZTO): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).