The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

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.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One stock to keep an eye on is The Gap (GAP). GAP is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock holds a P/E ratio of 9.04, while its industry has an average P/E of 15.04. Over the past year, GAP's Forward P/E has been as high as 20.01 and as low as 7.35, with a median of 11.23.

We should also highlight that GAP has a P/B ratio of 2.51. 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. This company's current P/B looks solid when compared to its industry's average P/B of 5.19. Within the past 52 weeks, GAP's P/B has been as high as 4.02 and as low as 2.04, with a median of 2.84.

Finally, our model also underscores that GAP has a P/CF ratio of 6.20. 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. GAP's P/CF compares to its industry's average P/CF of 11.90. GAP's P/CF has been as high as 9.34 and as low as 5.03, with a median of 6.71, all within the past year.

These are only a few of the key metrics included in The Gap'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, GAP looks like an impressive value stock at the moment.

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The Gap, Inc. (GAP) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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