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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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.
Internet Initiative Japan (IIJIY) is a stock many investors are watching right now. IIJIY is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 23.49 right now. For comparison, its industry sports an average P/E of 26.53. Over the past year, IIJIY’s Forward P/E has been as high as 35.30 and as low as 21.64, with a median of 26.49.
Another valuation metric that we should highlight is IIJIY’s P/B ratio of 4.46. The P/B ratio pits a stock’s market value against its book value, which is defined as total assets minus total liabilities. IIJIY’s current P/B looks attractive when compared to its industry’s average P/B of 7.44. IIJIY’s P/B has been as high as 4.77 and as low as 2.11, with a median of 3.23, over the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can’t really be manipulated, so sales are often a truer performance indicator. IIJIY has a P/S ratio of 1.85. This compares to its industry’s average P/S of 2.1.
Finally, we should also recognize that IIJIY has a P/CF ratio of 9.57. 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. IIJIY’s current P/CF looks attractive when compared to its industry’s average P/CF of 32.91. Over the past year, IIJIY’s P/CF has been as high as 10.23 and as low as 5.36, with a median of 7.40.
Sify Technologies Limited (SIFY) may be another strong Internet – Services stock to add to your shortlist. SIFY is a # 2 (Buy) stock with a Value grade of A.
Shares of Sify Technologies Limited currently holds a Forward P/E ratio of 21.84, and its PEG ratio is 1.09. In comparison, its industry sports average P/E and PEG ratios of 26.53 and 1.14.
SIFY’s Forward P/E has been as high as 57.86 and as low as 12.86, with a median of 29.55. During the same time period, its PEG ratio has been as high as 2.89, as low as 0.64, with a median of 1.48.
Furthermore, Sify Technologies Limited holds a P/B ratio of 2.93 and its industry’s price-to-book ratio is 7.44. SIFY’s P/B has been as high as 3.89, as low as 1.22, with a median of 3.32 over the past 12 months.
These are just a handful of the figures considered in Internet Initiative Japan and Sify Technologies Limited’s great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that IIJIY and SIFY is an impressive value stock right now.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.