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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 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 Best Buy (BBY - Free Report) . BBY is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 11.48, which compares to its industry's average of 18.90. Over the past 52 weeks, BBY's Forward P/E has been as high as 16.87 and as low as 10.83, with a median of 14.07.
Investors should also note that BBY holds a PEG ratio of 1.52. 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. BBY's industry currently sports an average PEG of 2.05. Over the past 52 weeks, BBY's PEG has been as high as 2.28 and as low as 1.26, with a median of 1.57.
Another valuation metric that we should highlight is BBY's P/B ratio of 6.29. 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 9.59. Over the past 12 months, BBY's P/B has been as high as 8.28 and as low as 5.55, with a median of 6.70.
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. BBY has a P/S ratio of 0.53. This compares to its industry's average P/S of 1.38.
Finally, investors should note that BBY has a P/CF ratio of 8.26. 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. This stock's P/CF looks attractive against its industry's average P/CF of 10.69. Over the past 52 weeks, BBY's P/CF has been as high as 12.91 and as low as 7.81, with a median of 10.43.
Value investors will likely look at more than just these metrics, but the above data helps show that Best Buy is likely undervalued currently. And when considering the strength of its earnings outlook, BBY sticks out at as one of the market's strongest value stocks.
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Is Best Buy (BBY) a Great Value Stock Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 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 Best Buy (BBY - Free Report) . BBY is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 11.48, which compares to its industry's average of 18.90. Over the past 52 weeks, BBY's Forward P/E has been as high as 16.87 and as low as 10.83, with a median of 14.07.
Investors should also note that BBY holds a PEG ratio of 1.52. 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. BBY's industry currently sports an average PEG of 2.05. Over the past 52 weeks, BBY's PEG has been as high as 2.28 and as low as 1.26, with a median of 1.57.
Another valuation metric that we should highlight is BBY's P/B ratio of 6.29. 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 9.59. Over the past 12 months, BBY's P/B has been as high as 8.28 and as low as 5.55, with a median of 6.70.
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. BBY has a P/S ratio of 0.53. This compares to its industry's average P/S of 1.38.
Finally, investors should note that BBY has a P/CF ratio of 8.26. 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. This stock's P/CF looks attractive against its industry's average P/CF of 10.69. Over the past 52 weeks, BBY's P/CF has been as high as 12.91 and as low as 7.81, with a median of 10.43.
Value investors will likely look at more than just these metrics, but the above data helps show that Best Buy is likely undervalued currently. And when considering the strength of its earnings outlook, BBY sticks out at as one of the market's strongest value stocks.