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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is Quanta Services (NYSE:PWR). PWR is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 10.54 right now. For comparison, its industry sports an average P/E of 12.89. Over the last 12 months, PWR's Forward P/E has been as high as 13.03 and as low as 8.48, with a median of 11.
Another valuation metric that we should highlight is PWR's P/B ratio of 1.51. The P/B is a method of comparing a stock's market value to 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 1.75. Within the past 52 weeks, PWR's P/B has been as high as 1.57 and as low as 1.09, with a median of 1.39.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. PWR has a P/S ratio of 0.47. This compares to its industry's average P/S of 0.55.
Finally, investors should note that PWR has a P/CF ratio of 10.42. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. PWR's current P/CF looks attractive when compared to its industry's average P/CF of 13.96. Over the past year, PWR's P/CF has been as high as 11.01 and as low as 7.26, with a median of 9.63.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Quanta Services is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, PWR feels like a great value stock at the moment.
Quanta Services, Inc. (PWR): Free Stock Analysis Report
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