At Zacks, we focus on our proven ranking system, which emphasizes profit estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we’re constantly on the lookout for the latest trends in value, growth, and momentum to find strong businesses for our readers.
Looking at the history of these trends, perhaps none is more appreciated than value investing. This strategy simply seeks to identify companies that are undervalued by the larger market. Value investors use proven metrics and fundamental analysis to find companies they believe are undervalued at their current stock price level.
In addition to the Zacks Ranking, investors looking for stocks with specific characteristics can use our style scoring system. Of course, value investors will be most interested in the “Value” category of the system. Stocks with “A” ratings for value and high Zacks ranks are some of the best stocks available at any given time.
One company to watch right now is Ethan Allen (ETH – Free report). ETH currently holds a Zacks rank of # 2 (Buy) and a value rating of A. The stock has a forward P / E ratio of 13.62. This compares to its industry’s average forecast P / E of 18.26. Over the past year, ETH’s forward P / E has been as high as 302.79 and as low as 7.13, with a median of 15.22.
Finally, investors will want to recognize that ETH has a P / CF ratio of 21.57. This metric focuses on a company’s operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash flow outlook. ETH’s P / CF compares to its industry’s average P / CF of 21.94. Over the past 52 weeks, ETH’s P / CF has been as high as 21.75 and as low as 6.03, with a median of 10.18.
These are just a few of the numbers factored into Ethan Allen’s highly valued note. Still, they help show that the title is probably undervalued at the moment. Add that to the strength of its earnings outlook and we can clearly see that ETH is currently an impressive stock.
