Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader 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.
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.
NuVasive (NUVA) is a stock many investors are watching right now. NUVA is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 19.10, which compares to its industry's average of 23.58. Over the past year, NUVA's Forward P/E has been as high as 24.59 and as low as 15.02, with a median of 19.99.
Investors should also note that NUVA holds a PEG ratio of 0.96. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. NUVA's PEG compares to its industry's average PEG of 2.71. NUVA's PEG has been as high as 1.99 and as low as 0.88, with a median of 1.29, all within the past year.
Another notable valuation metric for NUVA is its P/B ratio of 2.57. 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 stock's P/B looks solid versus its industry's average P/B of 5.06. Over the past year, NUVA's P/B has been as high as 3.67 and as low as 2.21, with a median of 2.72.
Another great Medical - Products stock you could consider is Koninklijke Philips (PHG), which is a # 1 (Strong Buy) stock with a Value Score of A.
Koninklijke Philips is trading at a forward earnings multiple of 18.49 at the moment, with a PEG ratio of 0.94. This compares to its industry's average P/E of 23.58 and average PEG ratio of 2.71.
PHG's price-to-earnings ratio has been as high as 25.96 and as low as 9.44, with a median of 13.40, while its PEG ratio has been as high as 1.31 and as low as 0.85, with a median of 1.06, all within the past year.
Koninklijke Philips also has a P/B ratio of 1.35 compared to its industry's price-to-book ratio of 5.06. Over the past year, its P/B ratio has been as high as 1.41, as low as 0.67, with a median of 1.07.
These are just a handful of the figures considered in NuVasive and Koninklijke Philips's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that NUVA and PHG is an impressive value stock right now.
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