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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 stock to keep an eye on is Teva Pharmaceutical Industries Ltd. (TEVA). TEVA is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 4.77, which compares to its industry's average of 9.06. Over the past year, TEVA's Forward P/E has been as high as 5.35 and as low as 2.50, with a median of 3.88.
Investors will also notice that TEVA has a PEG ratio of 0.81. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. TEVA's industry currently sports an average PEG of 1.12. Over the past 52 weeks, TEVA's PEG has been as high as 1.47 and as low as 0.56, with a median of 0.88.
Another valuation metric that we should highlight is TEVA's P/B ratio of 0.91. 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. TEVA's current P/B looks attractive when compared to its industry's average P/B of 1.32. Over the past year, TEVA's P/B has been as high as 0.98 and as low as 0.44, with a median of 0.71.
These are only a few of the key metrics included in Teva Pharmaceutical Industries Ltd.'s strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, TEVA looks like an impressive value stock at the moment.
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Teva Pharmaceutical Industries Ltd. (TEVA) : Free Stock Analysis Report
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