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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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 to watch right now is CNO Financial Group (CNO). CNO is currently holding a Zacks Rank #2 (Buy) and a Value grade of A.
Investors should also recognize that CNO has a P/B ratio of 1.52. 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. CNO's current P/B looks attractive when compared to its industry's average P/B of 2.50. Over the past 12 months, CNO's P/B has been as high as 1.75 and as low as 1.31, with a median of 1.50.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CNO has a P/S ratio of 1.01. This compares to its industry's average P/S of 1.02.
These figures are just a handful of the metrics value investors tend to look at, but they help show that CNO Financial Group is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CNO feels like a great value stock at the moment.
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CNO Financial Group, Inc. (CNO): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).