Should Value Investors Buy OneMain Holdings (OMF) Stock?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Neverthe...
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is OneMain Holdings (OMF). OMF is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 5.97. This compares to its industry's average Forward P/E of 7.56. OMF's Forward P/E has been as high as 8.40 and as low as 5.71, with a median of 6.73, all within the past year.
Finally, investors should note that OMF has a P/CF ratio of 4.71. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 5.70. Within the past 12 months, OMF's P/CF has been as high as 7.72 and as low as 4.36, with a median of 5.60.
Value investors will likely look at more than just these metrics, but the above data helps show that OneMain Holdings is likely undervalued currently. And when considering the strength of its earnings outlook, OMF sticks out at as one of the market's strongest value stocks.
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