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.
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.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company value investors might notice is Piedmont Realty Trust, Inc. (PDM). PDM is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 6.36. This compares to its industry's average Forward P/E of 15.40. Over the past year, PDM's Forward P/E has been as high as 7.42 and as low as 4.06, with a median of 5.54.
Another valuation metric that we should highlight is PDM's P/B ratio of 0.72. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. PDM's current P/B looks attractive when compared to its industry's average P/B of 1.83. PDM's P/B has been as high as 0.84 and as low as 0.46, with a median of 0.63, over the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. PDM has a P/S ratio of 2. This compares to its industry's average P/S of 3.58.
Finally, we should also recognize that PDM has a P/CF ratio of 7.02. 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 14.33. Over the past year, PDM's P/CF has been as high as 8.83 and as low as 4.29, with a median of 6.18.
Value investors will likely look at more than just these metrics, but the above data helps show that Piedmont Realty Trust, Inc. is likely undervalued currently. And when considering the strength of its earnings outlook, PDM sticks out as one of the market's strongest value stocks.
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Piedmont Realty Trust, Inc. (PDM): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).