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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
Deutsche Bank (DB) is a stock many investors are watching right now. DB is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 5.47, which compares to its industry's average of 7.76. Over the past 52 weeks, DB's Forward P/E has been as high as 7.21 and as low as 4.29, with a median of 5.48.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. DB has a P/S ratio of 0.57. This compares to its industry's average P/S of 1.41.
Another great Banks - Foreign stock you could consider is NatWest Group (NWG), which is a # 2 (Buy) stock with a Value Score of A.
Shares of NatWest Group are currently trading at a forward earnings multiple of 5.58 and a PEG ratio of 0.30 compared to its industry's P/E and PEG ratios of 7.76 and 0.77, respectively.
NWG's Forward P/E has been as high as 9.30 and as low as 4.87, with a median of 6.18. During the same time period, its PEG ratio has been as high as 0.83, as low as 0.17, with a median of 0.23.
Furthermore, NatWest Group holds a P/B ratio of 0.73 and its industry's price-to-book ratio is 1.48. NWG's P/B has been as high as 0.83, as low as 0.49, with a median of 0.67 over the past 12 months.
Value investors will likely look at more than just these metrics, but the above data helps show that Deutsche Bank and NatWest Group are likely undervalued currently. And when considering the strength of its earnings outlook, DB and NWG 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