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.
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 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 Avis Budget Group (CAR). CAR is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 6.62 right now. For comparison, its industry sports an average P/E of 16.52. CAR's Forward P/E has been as high as 15.49 and as low as 3.12, with a median of 6.77, all within 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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CAR has a P/S ratio of 0.59. This compares to its industry's average P/S of 1.
Investors could also keep in mind Crawford & Company (CRD.B), an Business - Services stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.
Furthermore, Crawford & Company holds a P/B ratio of 2.75 and its industry's price-to-book ratio is 3.42. CRD.B's P/B has been as high as 2.81, as low as 1.37, with a median of 1.78 over the past 12 months.
These are just a handful of the figures considered in Avis Budget Group and Crawford & Company's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that CAR and CRD.B is an impressive value stock right now.
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