Are These Finance Stocks Undervalued 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...
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 latest value, growth, and momentum trends to underscore 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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 UBS (UBS). UBS is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 9.87, while its industry has an average P/E of 10.27. Over the last 12 months, UBS's Forward P/E has been as high as 11.44 and as low as 8.36, with a median of 9.52.
Another valuation metric that we should highlight is UBS's P/B ratio of 1.11. Investors use the P/B ratio to look at a stock's market value versus 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 1.46. Over the past 12 months, UBS's P/B has been as high as 1.11 and as low as 0.86, with a median of 0.98.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. UBS has a P/S ratio of 1.92. This compares to its industry's average P/S of 1.98.
Finally, our model also underscores that UBS has a P/CF ratio of 7.04. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 27.29. UBS's P/CF has been as high as 7.04 and as low as 5.42, with a median of 6.41, all within the past year.
Another great Banks - Foreign stock you could consider is UniCredit (UNCFF), which is a # 2 (Buy) stock with a Value Score of A.
Additionally, UniCredit has a P/B ratio of 0.50 while its industry's price-to-book ratio sits at 1.46. For UNCFF, this valuation metric has been as high as 0.50, as low as 0.14, with a median of 0.36 over the past year.
These are only a few of the key metrics included in UBS and UniCredit strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, UBS and UNCFF look like an impressive value stock at the moment.
Bitcoin, Like the Internet Itself, Could Change Everything
Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.
Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.See 3 crypto-related stocks now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
UBS Group AG (UBS): Free Stock Analysis Report
UniCredit (UNCFF): Free Stock Analysis Report
To read this article on Zacks.com click here.