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.
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.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
Zagg (ZAGG) is a stock many investors are watching right now. ZAGG is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 7.09 right now. For comparison, its industry sports an average P/E of 15.41. Over the last 12 months, ZAGG's Forward P/E has been as high as 13.16 and as low as 5.40, with a median of 9.32.
We also note that ZAGG holds a PEG ratio of 0.95. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ZAGG's industry has an average PEG of 1.24 right now. Over the past 52 weeks, ZAGG's PEG has been as high as 2.92 and as low as 0.72, with a median of 1.45.
We should also highlight that ZAGG has a P/B ratio of 2.04. 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 2.53. ZAGG's P/B has been as high as 3.92 and as low as 1.55, with a median of 2.64, over the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. ZAGG has a P/S ratio of 0.56. This compares to its industry's average P/S of 1.39.
Finally, investors will want to recognize that ZAGG has a P/CF ratio of 6.32. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 10.46. ZAGG's P/CF has been as high as 12.75 and as low as 4.74, with a median of 8.74, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Zagg is likely undervalued currently. And when considering the strength of its earnings outlook, ZAGG sticks out at as one of the market's strongest value stocks.
ZAGG Inc (ZAGG): Free Stock Analysis Report
Original post