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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
Barnes & Noble Education (BNED) is a stock many investors are watching right now. BNED is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A.
Investors should also recognize that BNED has a P/B ratio of 1.12. 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. BNED's current P/B looks attractive when compared to its industry's average P/B of 3.00. Over the past 12 months, BNED's P/B has been as high as 2.05 and as low as 0.89, with a median of 1.33.
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 preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. BNED has a P/S ratio of 0.25. This compares to its industry's average P/S of 0.62.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Barnes & Noble Education is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BNED feels like a great value stock at the moment.
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Barnes & Noble Education, Inc (BNED) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
