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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
Merck $MRK KGaA (MKKGY) is a stock many investors are watching right now. MKKGY is currently sporting a Zacks Rank #2 (Buy) and an A for Value.
Investors should also recognize that MKKGY has a P/B ratio of 0.51. The P/B is a method of comparing a stock's market value to 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 1.43. Over the past year, MKKGY's P/B has been as high as 0.79 and as low as 0.49, with a median of 0.57.
Finally, investors will want to recognize that MKKGY has a P/CF ratio of 6.31. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. MKKGY's P/CF compares to its industry's average P/CF of 12.82. Over the past year, MKKGY's P/CF has been as high as 16.19 and as low as 5.95, with a median of 6.94.
Value investors will likely look at more than just these metrics, but the above data helps show that Merck KGaA is likely undervalued currently. And when considering the strength of its earnings outlook, MKKGY sticks out as one of the market's strongest value stocks.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X $TWTR Imaging which shot up +129.6% in little more than 9 months.
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