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, 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 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.
Ryder System (R) is a stock many investors are watching right now. R is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 12.74 right now. For comparison, its industry sports an average P/E of 15.81. Over the past 52 weeks, R's Forward P/E has been as high as 13.18 and as low as 9.22, with a median of 11.32.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by 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. R has a P/S ratio of 0.77. This compares to its industry's average P/S of 1.36.
Finally, investors should note that R has a P/CF ratio of 3.25. 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 6.02. Over the past year, R's P/CF has been as high as 3.35 and as low as 2.37, with a median of 2.93.
Value investors will likely look at more than just these metrics, but the above data helps show that Ryder System is likely undervalued currently. And when considering the strength of its earnings outlook, R sticks out as one of the market's strongest value stocks.
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Ryder System, Inc. (R): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).