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.
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.
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 value investors might notice is Renewable Energy Group (REGI). REGI is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
Another notable valuation metric for REGI is its P/B ratio of 0.78. 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. REGI's current P/B looks attractive when compared to its industry's average P/B of 2.28. REGI's P/B has been as high as 1.68 and as low as 0.59, with a median of 0.91, over the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. REGI has a P/S ratio of 0.35. This compares to its industry's average P/S of 0.55.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Renewable Energy Group is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, REGI feels like a great value stock at the moment.
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Renewable Energy Group, Inc. (REGI) : Free Stock Analysis Report
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