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...
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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.
One stock to keep an eye on is Credit Suisse Group (CS). CS is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
We should also highlight that CS has a P/B ratio of 0.54. 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 1.36. Within the past 52 weeks, CS's P/B has been as high as 0.80 and as low as 0.49, with a median of 0.56.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CS has a P/S ratio of 0.85. This compares to its industry's average P/S of 1.83.
Finally, investors should note that CS has a P/CF ratio of 15.21. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 25.54. Within the past 12 months, CS's P/CF has been as high as 16.91 and as low as 6.23, with a median of 13.21.
Another great Banks - Foreign stock you could consider is UniCredit (UNCFF), which is a # 2 (Buy) stock with a Value Score of A.
UniCredit sports a P/B ratio of 0.46 as well; this compares to its industry's price-to-book ratio of 1.36. In the past 52 weeks, UNCFF's P/B has been as high as 0.47, as low as 0.14, with a median of 0.35.
These are just a handful of the figures considered in Credit Suisse Group and UniCredit'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 CS and UNCFF is an impressive value stock right now.
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Credit Suisse Group (CS): Free Stock Analysis Report
UniCredit (UNCFF): Free Stock Analysis Report
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