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.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the “Value” category. Stocks with high Zacks Ranks and “A” grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is AMC Networks (AMCX). AMCX is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.
AMCX is also sporting a PEG ratio of 0.60. 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. AMCX’s industry currently sports an average PEG of 1.37. AMCX’s PEG has been as high as 1.09 and as low as 0.58, with a median of 0.77, all within the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock’s price with the company’s 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. AMCX has a P/S ratio of 0.89. This compares to its industry’s average P/S of 1.03.
These figures are just a handful of the metrics value investors tend to look at, but they help show that AMC Networks is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AMCX feels like a great value stock at the moment.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment