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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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 value investors might notice is Fox Factory Holdings (FOXF). FOXF is currently sporting a Zacks Rank #1 (Strong Buy), as well as a Value grade of A.
FOXF is also sporting a PEG ratio of 1.38. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. FOXF's industry currently sports an average PEG of 3.38. Within the past year, FOXF's PEG has been as high as 2.46 and as low as 1.33, with a median of 1.64.
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. FOXF has a P/S ratio of 0.57. This compares to its industry's average P/S of 0.63.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Fox Factory Holdings is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, FOXF feels like a great value stock at the moment.
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Fox Factory Holding Corp. (FOXF): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).