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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 value investors might notice is Barnes & Noble Education (BNED). BNED is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A.
Investors should also recognize that BNED has a P/B ratio of 1.12. Investors use the P/B ratio to look at a stock's market value versus 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 2.81. BNED's P/B has been as high as 2.05 and as low as 0.89, with a median of 1.33, over the past year.
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. BNED has a P/S ratio of 0.23. This compares to its industry's average P/S of 0.66.
These are just a handful of the figures considered in Barnes & Noble Education's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that BNED is an impressive value stock right now.
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Barnes & Noble Education, Inc (BNED): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).