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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader 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.

Pampa Energia (PAM) is a stock many investors are watching right now. PAM is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock has a Forward P/E ratio of 6.08. This compares to its industry's average Forward P/E of 14.19. Over the past 52 weeks, PAM's Forward P/E has been as high as 12.13 and as low as 5.52, with a median of 7.44.

Investors should also recognize that PAM has a P/B ratio of 1.26. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. PAM's current P/B looks attractive when compared to its industry's average P/B of 2.26. Within the past 52 weeks, PAM's P/B has been as high as 1.57 and as low as 0.76, with a median of 1.08.

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. PAM has a P/S ratio of 2.15. This compares to its industry's average P/S of 2.33.

Finally, our model also underscores that PAM has a P/CF ratio of 4.32. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 10.50. PAM's P/CF has been as high as 7.04 and as low as 3.36, with a median of 4.54, all within the past year.

Investors could also keep in mind PG&E (PCG), an Utility - Electric Power stock with a Zacks Rank of # 2 (Buy) and Value grade of A.

Shares of PG&E are currently trading at a forward earnings multiple of 11.10 and a PEG ratio of 1.13 compared to its industry's P/E and PEG ratios of 14.19 and 1.79, respectively.

PCG's Forward P/E has been as high as 14.79 and as low as 10.07, with a median of 12.89. During the same time period, its PEG ratio has been as high as 1.54, as low as 1.05, with a median of 1.37.

Furthermore, PG&E holds a P/B ratio of 1.56 and its industry's price-to-book ratio is 2.26. PCG's P/B has been as high as 2.10, as low as 1.38, with a median of 1.89 over the past 12 months.

Value investors will likely look at more than just these metrics, but the above data helps show that Pampa Energia and PG&E are likely undervalued currently. And when considering the strength of its earnings outlook, PAM and PCG sticks out as one of the market's strongest value stocks.

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This article originally published on Zacks Investment Research (zacks.com).

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