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 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.
Invesco (IVZ) is a stock many investors are watching right now. IVZ 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 10.45 right now. For comparison, its industry sports an average P/E of 13.54. Over the past year, IVZ's Forward P/E has been as high as 11.12 and as low as 6.39, with a median of 9.43.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. IVZ has a P/S ratio of 1.91. This compares to its industry's average P/S of 3.15.
Value investors will likely look at more than just these metrics, but the above data helps show that Invesco is likely undervalued currently. And when considering the strength of its earnings outlook, IVZ sticks out as one of the market's strongest value stocks.
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Invesco Ltd. (IVZ): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).