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Should Value Investors Buy National Vision (EYE) Stock?

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company value investors might notice is National Vision (EYE). EYE is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.

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EYE is also sporting a PEG ratio of 1.94. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. EYE's industry currently sports an average PEG of 2.65. Within the past year, EYE's PEG has been as high as 1.94 and as low as 0.92, with a median of 1.64.

Another valuation metric that we should highlight is EYE's P/B ratio of 1.99. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 4.66. EYE's P/B has been as high as 4.03 and as low as 1.97, with a median of 3.24, over the past year.

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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. EYE has a P/S ratio of 0.88. This compares to its industry's average P/S of 1.7.

Smith & Nephew SNATS (SNN) may be another strong Medical - Products stock to add to your shortlist. SNN is a # 2 (Buy) stock with a Value grade of A.

Shares of Smith & Nephew SNATS are currently trading at a forward earnings multiple of 16.44 and a PEG ratio of 1.97 compared to its industry's P/E and PEG ratios of 22.47 and 2.65, respectively.

Over the last 12 months, SNN's P/E has been as high as 19.31, as low as 12.80, with a median of 15.82, and its PEG ratio has been as high as 3.26, as low as 1.75, with a median of 2.17.

Smith & Nephew SNATS also has a P/B ratio of 2.38 compared to its industry's price-to-book ratio of 4.66. Over the past year, its P/B ratio has been as high as 2.78, as low as 1.77, with a median of 2.23.

Value investors will likely look at more than just these metrics, but the above data helps show that National Vision and Smith & Nephew SNATS are likely undervalued currently. And when considering the strength of its earnings outlook, EYE and SNN sticks out as one of the market's strongest value stocks.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

National Vision Holdings, Inc. (EYE) : Free Stock Analysis Report

Smith & Nephew SNATS, Inc. (SNN) : Free Stock Analysis Report

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Zacks Investment Research