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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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company value investors might notice is Seven and I Holdings Co. (SVNDY). SVNDY is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 12.85, which compares to its industry's average of 16.71. Over the past 52 weeks, SVNDY's Forward P/E has been as high as 13.48 and as low as 9.88, with a median of 11.76.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. SVNDY has a P/S ratio of 0.5. This compares to its industry's average P/S of 0.7.
Finally, our model also underscores that SVNDY has a P/CF ratio of 7.52. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. SVNDY's current P/CF looks attractive when compared to its industry's average P/CF of 19.81. SVNDY's P/CF has been as high as 7.83 and as low as 5.65, with a median of 6.50, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Seven and I Holdings Co. Is likely undervalued currently. And when considering the strength of its earnings outlook, SVNDY sticks out at as one of the market's strongest value stocks.
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