Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 to watch right now is Silgan Holdings (SLGN). SLGN is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 10.09, while its industry has an average P/E of 13.48. Over the past year, SLGN's Forward P/E has been as high as 14.44 and as low as 10.09, with a median of 12.71.
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. SLGN has a P/S ratio of 0.72. This compares to its industry's average P/S of 0.84.
Finally, investors should note that SLGN has a P/CF ratio of 7.57. 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 14.44. Over the past year, SLGN's P/CF has been as high as 10.88 and as low as 7.57, with a median of 9.87.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Silgan Holdings is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SLGN feels like a great value stock at the moment.
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Silgan Holdings Inc. (SLGN): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).