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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 to watch right now is WPP (WPP). WPP is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 9.34, while its industry has an average P/E of 11. Over the last 12 months, WPP's Forward P/E has been as high as 10.78 and as low as 7.19, with a median of 8.87.
Another notable valuation metric for WPP is its P/B ratio of 2.50. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 5.61. WPP's P/B has been as high as 2.64 and as low as 1.65, with a median of 2.12, over the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that WPP is likely undervalued currently. And when considering the strength of its earnings outlook, WPP sticks out at as one of the market's strongest value stocks.
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