The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
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.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company value investors might notice is OptimizeRx (OPRX). OPRX is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value.
OPRX is also sporting a PEG ratio of 0.96. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. OPRX's industry has an average PEG of 1.28 right now. Within the past year, OPRX's PEG has been as high as 1.13 and as low as 0.33, with a median of 0.76.
We should also highlight that OPRX has a P/B ratio of 2.83. 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. OPRX's current P/B looks attractive when compared to its industry's average P/B of 5.67. Within the past 52 weeks, OPRX's P/B has been as high as 2.94 and as low as 0.61, with a median of 1.25.
Progress Software (PRGS) may be another strong Computer - Software stock to add to your shortlist. PRGS is a Zacks Rank of #2 (Buy) stock with a Value grade of A.
Shares of Progress Software currently hold a Forward P/E ratio of 7.46, and its PEG ratio is 1.49. In comparison, its industry sports average P/E and PEG ratios of 19.76 and 1.28.
Over the last 12 months, PRGS's P/E has been as high as 14.46, as low as 7.37, with a median of 10.95, and its PEG ratio has been as high as 7.23, as low as 1.47, with a median of 2.21.
Progress Software also has a P/B ratio of 4.00 compared to its industry's price-to-book ratio of 5.67. Over the past year, its P/B ratio has been as high as 7.05, as low as 3.95, with a median of 5.89.
Value investors will likely look at more than just these metrics, but the above data helps show that OptimizeRx and Progress Software are likely undervalued currently. And when considering the strength of its earnings outlook, OPRX and PRGS sticks out as one of the market's strongest value stocks.
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OptimizeRx Corp. (OPRX): Free Stock Analysis Report
Progress Software Corporation (PRGS): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).