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.
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 Reinsurance Group of America (RGA). RGA is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 7.54 right now. For comparison, its industry sports an average P/E of 11.02. RGA's Forward P/E has been as high as 10.24 and as low as 7.17, with a median of 8.48, all within the past year.
Another notable valuation metric for RGA is its P/B ratio of 1.02. 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. This stock's P/B looks solid versus its industry's average P/B of 2.25. Over the past 12 months, RGA's P/B has been as high as 1.47 and as low as 0.96, with a median of 1.18.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. RGA has a P/S ratio of 0.61. This compares to its industry's average P/S of 0.79.
These are only a few of the key metrics included in Reinsurance Group of America'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, RGA looks like an impressive value stock at the moment.
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Reinsurance Group of America, Incorporated (RGA): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).