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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.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One stock to keep an eye on is Ericsson (ERIC - Free Report) . ERIC is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 16.38 right now. For comparison, its industry sports an average P/E of 21.04. ERIC's Forward P/E has been as high as 18.67 and as low as 10.39, with a median of 13.71, all within the past year.
Another valuation metric that we should highlight is ERIC's P/B ratio of 3.33. The P/B ratio pits a stock's market value against 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 7.51. Over the past year, ERIC's P/B has been as high as 3.49 and as low as 1.54, with a median of 2.10.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. ERIC has a P/S ratio of 1.16. This compares to its industry's average P/S of 1.98.
Value investors will likely look at more than just these metrics, but the above data helps show that Ericsson is likely undervalued currently. And when considering the strength of its earnings outlook, ERIC sticks out at as one of the market's strongest value stocks.
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Is Ericsson (ERIC) Stock Undervalued Right Now?
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.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One stock to keep an eye on is Ericsson (ERIC - Free Report) . ERIC is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 16.38 right now. For comparison, its industry sports an average P/E of 21.04. ERIC's Forward P/E has been as high as 18.67 and as low as 10.39, with a median of 13.71, all within the past year.
Another valuation metric that we should highlight is ERIC's P/B ratio of 3.33. The P/B ratio pits a stock's market value against 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 7.51. Over the past year, ERIC's P/B has been as high as 3.49 and as low as 1.54, with a median of 2.10.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. ERIC has a P/S ratio of 1.16. This compares to its industry's average P/S of 1.98.
Value investors will likely look at more than just these metrics, but the above data helps show that Ericsson is likely undervalued currently. And when considering the strength of its earnings outlook, ERIC sticks out at as one of the market's strongest value stocks.