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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 Ingredion (INGR). INGR is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 11.29, which compares to its industry's average of 16.87. Over the past 52 weeks, INGR's Forward P/E has been as high as 13.10 and as low as 9.36, with a median of 11.25.
INGR is also sporting a PEG ratio of 1.03. 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. INGR's industry has an average PEG of 2.13 right now. Over the last 12 months, INGR's PEG has been as high as 1.07 and as low as 0.85, with a median of 0.99.
We should also highlight that INGR has a P/B ratio of 2.13. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 2.21. Within the past 52 weeks, INGR's P/B has been as high as 2.27 and as low as 1.76, with a median of 2.08.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. INGR has a P/S ratio of 0.88. This compares to its industry's average P/S of 0.91.
Finally, we should also recognize that INGR has a P/CF ratio of 8.76. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 16.38. Within the past 12 months, INGR's P/CF has been as high as 9.82 and as low as 7.10, with a median of 8.86.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Ingredion is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, INGR feels like a great value stock at the moment.
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