Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we a
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
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 stock to keep an eye on is Gerdau (GGB). GGB is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 7.47, which compares to its industry's average of 12.16. Over the past 52 weeks, GGB's Forward P/E has been as high as 7.73 and as low as 4.76, with a median of 6.35.
Investors should also note that GGB holds a PEG ratio of 0.64. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. GGB's PEG compares to its industry's average PEG of 0.70. Over the past 52 weeks, GGB's PEG has been as high as 2.91 and as low as 0.56, with a median of 1.20.
Value investors will likely look at more than just these metrics, but the above data helps show that Gerdau is likely undervalued currently. And when considering the strength of its earnings outlook, GGB sticks out as one of the market's strongest value stocks.
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