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, 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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 company value investors might notice is Suzuki Motor (SZKMY). SZKMY is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value.
We should also highlight that SZKMY has a P/B ratio of 0.86. 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 1.06. Over the past 12 months, SZKMY's P/B has been as high as 1.21 and as low as 0.86, with a median of 1.04.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. SZKMY has a P/S ratio of 0.55. This compares to its industry's average P/S of 0.74.
Value investors will likely look at more than just these metrics, but the above data helps show that Suzuki Motor is likely undervalued currently. And when considering the strength of its earnings outlook, SZKMY sticks out at as one of the market's strongest value stocks.
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