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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. 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 company value investors might notice is LKQ (LKQ - Free Report) . LKQ is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 9.72. This compares to its industry's average Forward P/E of 11.08. Over the last 12 months, LKQ's Forward P/E has been as high as 12.81 and as low as 9.27, with a median of 10.51.
Another valuation metric that we should highlight is LKQ's P/B ratio of 1.51. 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 1.90. LKQ's P/B has been as high as 2.31 and as low as 1.50, with a median of 1.79, 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. LKQ has a P/S ratio of 0.65. This compares to its industry's average P/S of 0.98.
Finally, we should also recognize that LKQ has a P/CF ratio of 8.57. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 11.73. Over the past year, LKQ's P/CF has been as high as 12.09 and as low as 8.51, with a median of 9.75.
These figures are just a handful of the metrics value investors tend to look at, but they help show that LKQ is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, LKQ feels like a great value stock at the moment.
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Should Value Investors Buy LKQ (LKQ) Stock?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. 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 company value investors might notice is LKQ (LKQ - Free Report) . LKQ is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 9.72. This compares to its industry's average Forward P/E of 11.08. Over the last 12 months, LKQ's Forward P/E has been as high as 12.81 and as low as 9.27, with a median of 10.51.
Another valuation metric that we should highlight is LKQ's P/B ratio of 1.51. 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 1.90. LKQ's P/B has been as high as 2.31 and as low as 1.50, with a median of 1.79, 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. LKQ has a P/S ratio of 0.65. This compares to its industry's average P/S of 0.98.
Finally, we should also recognize that LKQ has a P/CF ratio of 8.57. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 11.73. Over the past year, LKQ's P/CF has been as high as 12.09 and as low as 8.51, with a median of 9.75.
These figures are just a handful of the metrics value investors tend to look at, but they help show that LKQ is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, LKQ feels like a great value stock at the moment.