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.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
One company value investors might notice is BorgWarner (BWA). BWA is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 7.75, while its industry has an average P/E of 21.31. Over the past year, BWA’s Forward P/E has been as high as 12.78 and as low as 7.16, with a median of 9.03.
Another valuation metric that we should highlight is BWA’s P/B ratio of 1.23. 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 attractive against its industry’s average P/B of 3.45. Over the past year, BWA’s P/B has been as high as 1.66 and as low as 1.08, with a median of 1.41.
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. BWA has a P/S ratio of 0.6. This compares to its industry’s average P/S of 0.85.
These are just a handful of the figures considered in BorgWarner’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 BWA is an impressive value stock right now.
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BorgWarner Inc. (BWA) : Free Stock Analysis Report
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