Are Investors Undervaluing These Finance Stocks Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to...
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, 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.
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 stock to keep an eye on is Fidelity National Financial (FNF). FNF is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. FNF has a P/S ratio of 1.01. This compares to its industry's average P/S of 1.02.
Finally, investors will want to recognize that FNF has a P/CF ratio of 4.41. 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. FNF's current P/CF looks attractive when compared to its industry's average P/CF of 5.50. Within the past 12 months, FNF's P/CF has been as high as 9.51 and as low as 3.87, with a median of 4.97.
Investors could also keep in mind Markel (MKL), an Insurance - Property and Casualty stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Additionally, Markel has a P/B ratio of 1.25 while its industry's price-to-book ratio sits at 1.32. For MKL, this valuation metric has been as high as 1.36, as low as 1.06, with a median of 1.28 over the past year.
These are only a few of the key metrics included in Fidelity National Financial and Markel strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, FNF and MKL look like an impressive value stock at the moment.
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Fidelity National Financial, Inc. (FNF): Free Stock Analysis Report
Markel Corporation (MKL): Free Stock Analysis Report
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