While the proven Zacks Rank emphasizes earnings estimates and revisions of estimates to find solid stocks, we also know that investors tend to develop their own individual strategies. With that in mind, we always look at trends in value, growth, and momentum to uncover great companies.
Of these, investing in value is easily one of the most popular ways to find great stocks in any market environment. Value investors use proven metrics and fundamental analysis to find companies they believe are undervalued at their current stock price level.
Zacks has developed the innovative Style Scores system to highlight stocks with specific characteristics. For example, value investors will be interested in stocks with good ratings in the “Value” category. When paired with a high Zacks ranking, “A” ratings in the Value category are among the strongest value stocks on the market today.
One stock to watch is Piper Sandler Companies (PIPR – Free report). PIPR currently holds a Zacks rank of No.2 (buy) and a value rating of A. The stock holds a P / E ratio of 9.25, while its industry has an average P / E of 12.38. Over the past 52 weeks, PIPR’s forward P / E has reached 15.01 and as low as 9.25, with a median of 12.27.
Note also that PIPR has a P / B ratio of 2.20. P / B is a method of comparing the market value of a stock to its book value, which is defined as total assets minus total liabilities. PIPR’s current P / B looks attractive compared to its industry’s average P / B of 2.58. Over the past 12 months, PIPR’s P / B has been as high as 2.49 and as low as 1.35, with a median of 2.02.
Value investors also frequently use the P / S ratio. This measurement is obtained by dividing the price of a stock by the turnover of the company. This is a popular metric because sales are more difficult to manipulate on an income statement, so they are often seen as a better indicator of performance. PIPR has a P / S ratio of 1.47. This compares to its industry’s average P / S of 1.97.
Finally, our model also emphasizes that PIPR has a P / CF ratio of 12.17. This data point takes into account a company’s operating cash flow and is frequently used to find undervalued companies given their strong cash flow outlook. This stock’s P / CF looks attractive compared to its industry’s average P / CF of 17.47. Over the past 12 months, PIPR’s P / CF has been as high as 19.61 and as low as 8.25, with a median of 13.28.
These are just a few of the numbers reflected in the high quality Value of Piper Sandler Companies. Still, they help show that the title is probably undervalued right now. Add that to the strength of its earnings outlook, and we can clearly see that PIPR is an impressive value stock right now.