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.
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 PLDT (PHI). PHI is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 8.81, which compares to its industry’s average of 11.64. Over the past year, PHI’s Forward P/E has been as high as 12.21 and as low as 8.62, with a median of 10.08.
We should also highlight that PHI has a P/B ratio of 1.93. Investors use the P/B ratio to look at a stock’s market value versus its book value, which is defined as total assets minus total liabilities. This stock’s P/B looks solid versus its industry’s average P/B of 2.23. Over the past year, PHI’s P/B has been as high as 2.56 and as low as 1.90, with a median of 2.14.
Finally, investors will want to recognize that PHI has a P/CF ratio of 3.37. 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. This company’s current P/CF looks solid when compared to its industry’s average P/CF of 6.77. PHI’s P/CF has been as high as 4.46 and as low as 3.31, with a median of 3.77, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that PLDT is likely undervalued currently. And when considering the strength of its earnings outlook, PHI sticks out at as one of the market’s strongest value stocks.
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