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, 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 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.
Newell Brands (NWL) is a stock many investors are watching right now. NWL is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 8.03 right now. For comparison, its industry sports an average P/E of 18.58. Over the past 52 weeks, NWL's Forward P/E has been as high as 15.23 and as low as 5.93, with a median of 8.85.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. NWL has a P/S ratio of 0.3. This compares to its industry's average P/S of 0.82.
Finally, our model also underscores that NWL has a P/CF ratio of 5.58. 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. NWL's current P/CF looks attractive when compared to its industry's average P/CF of 13.04. Over the past year, NWL's P/CF has been as high as 11.38 and as low as 4.42, with a median of 6.09.
These are just a handful of the figures considered in Newell Brands's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that NWL is an impressive value stock right now.
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Newell Brands Inc. (NWL): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).