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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
Nokia (NOK) is a stock many investors are watching right now. NOK is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 11.97, while its industry has an average P/E of 14.25. Over the past 52 weeks, NOK's Forward P/E has been as high as 19.46 and as low as 10.89, with a median of 15.24.
Investors should also note that NOK holds a PEG ratio of 1.15. 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. NOK's industry has an average PEG of 1.28 right now. Within the past year, NOK's PEG has been as high as 13.06 and as low as 1.05, with a median of 9.71.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. NOK has a P/S ratio of 1.12. This compares to its industry's average P/S of 1.31.
Finally, investors will want to recognize that NOK has a P/CF ratio of 9.06. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 26.42. Over the past year, NOK's P/CF has been as high as 11.18 and as low as -52.19, with a median of -37.07.
Viasat (VSAT) may be another strong Wireless Equipment stock to add to your shortlist. VSAT is a # 2 (Buy) stock with a Value grade of A.
Shares of Viasat currently holds a Forward P/E ratio of -304.24, and its PEG ratio is 30.05. In comparison, its industry sports average P/E and PEG ratios of 14.25 and 1.28.
VSAT's Forward P/E has been as high as 964.60 and as low as -753.99, with a median of 184.74. During the same time period, its PEG ratio has been as high as 38.82, as low as 4.53, with a median of 20.94.
Viasat sports a P/B ratio of 1.27 as well; this compares to its industry's price-to-book ratio of 7.15. In the past 52 weeks, VSAT's P/B has been as high as 1.84, as low as 1.13, with a median of 1.37.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Nokia and Viasat are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, NOK and VSAT feels like a great value stock at the moment.
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