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.<\/p>\n
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.<\/p>\n
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the “Value” category. When paired with a high Zacks Rank, “A” grades in the Value category are among the strongest value stocks on the market today.<\/p>\n
One company to watch right now is Rio Tinto (RIO). RIO is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock holds a P\/E ratio of 9.99, while its industry has an average P\/E of 15.14. Over the last 12 months, RIO’s Forward P\/E has been as high as 10.78 and as low as 8.49, with a median of 9.64.<\/p>\n
We also note that RIO holds a PEG ratio of 0.37. This popular metric is similar to the widely-known P\/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. RIO’s industry has an average PEG of 0.95 right now. Within the past year, RIO’s PEG has been as high as 0.43 and as low as 0.35, with a median of 0.39.<\/p>\n
These figures are just a handful of the metrics value investors tend to look at, but they help show that Rio Tinto is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, RIO feels like a great value stock at the moment.<\/p>\n
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report<\/a><\/p>\n Rio Tinto PLC (RIO) : Free Stock Analysis Report<\/a><\/p>\n This article originally published on Zacks Investment Research (zacks.com).<\/a><\/p>\n