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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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.
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.
Apergy (APY) is a stock many investors are watching right now. APY is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 9.42. This compares to its industry's average Forward P/E of 16.07. Over the past 52 weeks, APY's Forward P/E has been as high as 34.05 and as low as 4.48, with a median of 20.15.
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. APY has a P/S ratio of 0.21. This compares to its industry's average P/S of 0.29.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Apergy is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, APY feels like a great value stock at the moment.
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