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, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 to watch right now is H. B. Fuller (FUL). FUL is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 12.94 right now. For comparison, its industry sports an average P/E of 22.39. FUL's Forward P/E has been as high as 18.44 and as low as 11.31, with a median of 13.44, all within the past year.
Investors should also note that FUL holds a PEG ratio of 0.89. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. FUL's industry has an average PEG of 1.35 right now. FUL's PEG has been as high as 1.54 and as low as 0.71, with a median of 1.01, all within the past year.
Investors should also recognize that FUL has a P/B ratio of 1.75. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 3.06. Within the past 52 weeks, FUL's P/B has been as high as 2.49 and as low as 1.48, with a median of 1.77.
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. FUL has a P/S ratio of 0.94. This compares to its industry's average P/S of 1.83.
Finally, our model also underscores that FUL has a P/CF ratio of 11.92. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 13.46. Within the past 12 months, FUL's P/CF has been as high as 14.30 and as low as 9.48, with a median of 11.67.
These are only a few of the key metrics included in H. B. Fuller's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, FUL looks like an impressive value stock at the moment.
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H. B. Fuller Company (FUL): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).