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Are These Finance Stocks Undervalued Right Now?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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.

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 Evercore (EVR - Free Report) . EVR is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 9.96 right now. For comparison, its industry sports an average P/E of 14.29. Over the past 52 weeks, EVR's Forward P/E has been as high as 14.44 and as low as 9.15, with a median of 11.68.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. EVR has a P/S ratio of 1.58. This compares to its industry's average P/S of 2.14.

Finally, our model also underscores that EVR has a P/CF ratio of 8.20. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. EVR's current P/CF looks attractive when compared to its industry's average P/CF of 18.59. Over the past 52 weeks, EVR's P/CF has been as high as 16.42 and as low as 7.94, with a median of 10.59.

If you're looking for another solid Financial - Investment Bank value stock, take a look at Morgan Stanley (MS - Free Report) . MS is a # 2 (Buy) stock with a Value score of A.

Shares of Morgan Stanley are currently trading at a forward earnings multiple of 13.07 and a PEG ratio of 1.67 compared to its industry's P/E and PEG ratios of 14.29 and 0.75, respectively.

MS's price-to-earnings ratio has been as high as 14.58 and as low as 11.69, with a median of 13.37, while its PEG ratio has been as high as 2.30 and as low as 1.17, with a median of 1.93, all within the past year.

Additionally, Morgan Stanley has a P/B ratio of 1.79 while its industry's price-to-book ratio sits at 2.80. For MS, this valuation metric has been as high as 1.92, as low as 1.30, with a median of 1.73 over the past year.

Value investors will likely look at more than just these metrics, but the above data helps show that Evercore and Morgan Stanley are likely undervalued currently. And when considering the strength of its earnings outlook, EVR and MS sticks out as one of the market's strongest value stocks.


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