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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, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.
One company to watch right now is Synchrony (SYF - Free Report) . SYF is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 5.42. This compares to its industry's average Forward P/E of 7.89. Over the past 52 weeks, SYF's Forward P/E has been as high as 15.25 and as low as 5.19, with a median of 9.02.
We also note that SYF holds a PEG ratio of 0.52. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. SYF's PEG compares to its industry's average PEG of 0.82. Over the last 12 months, SYF's PEG has been as high as 1.99 and as low as 0.49, with a median of 1.01.
We should also highlight that SYF has a P/B ratio of 1.19. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. SYF's current P/B looks attractive when compared to its industry's average P/B of 1.61. Over the past 12 months, SYF's P/B has been as high as 2.18 and as low as 1.14, with a median of 1.74.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. SYF has a P/S ratio of 0.96. This compares to its industry's average P/S of 1.63.
Finally, our model also underscores that SYF has a P/CF ratio of 6.38. 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. SYF's P/CF compares to its industry's average P/CF of 9.98. SYF's P/CF has been as high as 14.40 and as low as 6.11, with a median of 10.76, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Synchrony is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SYF feels like a great value stock at the moment.
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Should Value Investors Buy Synchrony (SYF) Stock?
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, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.
One company to watch right now is Synchrony (SYF - Free Report) . SYF is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 5.42. This compares to its industry's average Forward P/E of 7.89. Over the past 52 weeks, SYF's Forward P/E has been as high as 15.25 and as low as 5.19, with a median of 9.02.
We also note that SYF holds a PEG ratio of 0.52. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. SYF's PEG compares to its industry's average PEG of 0.82. Over the last 12 months, SYF's PEG has been as high as 1.99 and as low as 0.49, with a median of 1.01.
We should also highlight that SYF has a P/B ratio of 1.19. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. SYF's current P/B looks attractive when compared to its industry's average P/B of 1.61. Over the past 12 months, SYF's P/B has been as high as 2.18 and as low as 1.14, with a median of 1.74.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. SYF has a P/S ratio of 0.96. This compares to its industry's average P/S of 1.63.
Finally, our model also underscores that SYF has a P/CF ratio of 6.38. 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. SYF's P/CF compares to its industry's average P/CF of 9.98. SYF's P/CF has been as high as 14.40 and as low as 6.11, with a median of 10.76, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Synchrony is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SYF feels like a great value stock at the moment.