Should Value Investors Buy These Finance Stocks?
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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company to watch right now is Janus Henderson Group (JHG). JHG is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 11.04, which compares to its industry's average of 13.79. Over the past year, JHG's Forward P/E has been as high as 13 and as low as 8.15, with a median of 10.38.
We should also highlight that JHG has a P/B ratio of 1.60. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 2.91. Over the past year, JHG's P/B has been as high as 1.77 and as low as 1.09, with a median of 1.48.
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. JHG has a P/S ratio of 2.63. This compares to its industry's average P/S of 3.11.
Finally, investors should note that JHG has a P/CF ratio of 10.18. 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. JHG's P/CF compares to its industry's average P/CF of 14.58. Within the past 12 months, JHG's P/CF has been as high as 11.31 and as low as 4.75, with a median of 6.94.
Another great Financial - Investment Management stock you could consider is Victory Capital Holdings (VCTR), which is a # 2 (Buy) stock with a Value Score of A.
Shares of Victory Capital Holdings currently holds a Forward P/E ratio of 6.46, and its PEG ratio is 0.74. In comparison, its industry sports average P/E and PEG ratios of 13.79 and 0.74.
VCTR's price-to-earnings ratio has been as high as 8.63 and as low as 4.94, with a median of 6.55, while its PEG ratio has been as high as 0.74 and as low as 0.38, with a median of 0.68, all within the past year.
Victory Capital Holdings sports a P/B ratio of 2.72 as well; this compares to its industry's price-to-book ratio of 2.91. In the past 52 weeks, VCTR's P/B has been as high as 3.33, as low as 2.03, with a median of 2.68.
These are only a few of the key metrics included in Janus Henderson Group and Victory Capital Holdings strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, JHG and VCTR look like an impressive value stock at the moment.
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