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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is Tutor Perini (TPC). TPC is currently sporting a Zacks Rank #1 (Strong Buy), as well as a Value grade of A. The stock holds a P/E ratio of 14.92, while its industry has an average P/E of 17.46. Over the past 52 weeks, TPC's Forward P/E has been as high as 21.71 and as low as -18.85, with a median of 16.26.
Another notable valuation metric for TPC is its P/B ratio of 2.78. 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. This stock's P/B looks attractive against its industry's average P/B of 4.91. Over the past year, TPC's P/B has been as high as 2.81 and as low as 0.87, with a median of 1.16.
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. TPC has a P/S ratio of 0.74. This compares to its industry's average P/S of 1.02.
Value investors will likely look at more than just these metrics, but the above data helps show that Tutor Perini is likely undervalued currently. And when considering the strength of its earnings outlook, TPC sticks out as one of the market's strongest value stocks.
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Tutor Perini Corporation (TPC): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).