While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
One stock to keep an eye on is Sociedad Quimica y Minera (SQM). SQM is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 5.43, which compares to its industry's average of 6.11. SQM's Forward P/E has been as high as 19.65 and as low as 4.87, with a median of 9, all within the past year.
SQM is also sporting a PEG ratio of 0.37. 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. SQM's industry currently sports an average PEG of 0.86. Over the past 52 weeks, SQM's PEG has been as high as 0.80 and as low as 0.29, with a median of 0.45.
These are only a few of the key metrics included in Sociedad Quimica y Minera's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, SQM looks like an impressive value stock at the moment.
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