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.
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.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is Quanex Building Products (NX). NX is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 6.42, which compares to its industry's average of 18.01. Over the past 52 weeks, NX's Forward P/E has been as high as 12.99 and as low as 5.16, with a median of 7.91.
Investors will also notice that NX has a PEG ratio of 0.46. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. NX's PEG compares to its industry's average PEG of 1.26. Within the past year, NX's PEG has been as high as 0.93 and as low as 0.37, with a median of 0.56.
Value investors will likely look at more than just these metrics, but the above data helps show that Quanex Building Products is likely undervalued currently. And when considering the strength of its earnings outlook, NX sticks out as one of the market's strongest value stocks.
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Quanex Building Products Corporation (NX): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).