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.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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.
Hannover Ruck (HVRRY) is a stock many investors are watching right now. HVRRY is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 12.56 right now. For comparison, its industry sports an average P/E of 20.71. Over the past year, HVRRY's Forward P/E has been as high as 16.99 and as low as 9.48, with a median of 11.02.
Another notable valuation metric for HVRRY is its P/B ratio of 2.74. The P/B ratio is used to compare a stock's market value with 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 8.21. Over the past year, HVRRY's P/B has been as high as 2.75 and as low as 1.19, with a median of 1.66.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. HVRRY has a P/S ratio of 0.77. This compares to its industry's average P/S of 1.1.
Finally, investors should note that HVRRY has a P/CF ratio of 19.01. 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. HVRRY's P/CF compares to its industry's average P/CF of 19.95. Within the past 12 months, HVRRY's P/CF has been as high as 19.09 and as low as 11.39, with a median of 13.89.
These are only a few of the key metrics included in Hannover Ruck'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, HVRRY looks like an impressive value stock at the moment.
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