Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put JMP Group Inc. stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, JMP Group has a trailing twelve months PE ratio of 41.00, as you can see in the chart below:
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This level actually is not pretty favorably with the market at large, as the PE for the S&P 500 compares in at about 19.84. If we focus on the stock’s long-term PE trend, the current level puts JMP Group’s current PE ratio above its midpoint over the past five years, with the number having risen rapidly over the past few months.
Further, the stock’s PE also does not compare favorably with the Zacks classified Finance-Investment Brokers industry’s trailing twelve months PE ratio, which stands at 18.71. At the very least, this indicates that the stock is relatively overvalued right now, compared to its peers.
However, we should also point out that JMP Group has a forward PE ratio (price relative to this year’s earnings) of just 13.67, so it is fair to say that a slightly more value-oriented path may be ahead for JMP Group stock in the near term.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, JMP Group has a P/S ratio of about 1.2. This is a bit lower than the S&P 500 average, which comes in at nearly 3 right now. Also, as we can see in the chart below, this is well below the highs for this stock in particular over the past few years.
If anything, JMP is in the lower end of its range in the time period from a P/S metric, suggesting some level of undervalued trading—at least compared to historical norms.
Broad Value Outlook
In aggregate, JMP Group currently has a Zacks Value Style Score of ‘A’, putting it into the top 20% of all stocks we cover from this look. This makes JMP a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, its P/CF ratio (another great indicator of value) comes in at 3.73, which is far better than the industry average of 4.44. Clearly, JMP is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though JMP Group might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘C’ and a Momentum score of ‘B’. This gives JMP a Zacks VGM score—or its overarching fundamental grade—of ‘A’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been mixed at best. The current quarter has seen no estimates go higher in the past sixty days compared to one lower, while the full year estimate has seen one up and no down in the same time period.
This has had a mixed impact on the consensus estimate as well, as the current quarter consensus estimate has fallen by 23.1% in the past two months, while the full year estimate has gone up by 12.5%. You can see the consensus estimate trend and recent price actionfor the stock in the chart below:
This mixed trend indicates that while the stock’s growth story is intact over the medium term, analysts have some apprehensions about the stock in the immediate future.
Also consider the fact that the company boasts a Zacks Rank #2 (Buy), which indicates robust fundamentals and expectations of outperformance in the near term. Thus, we can say that while investors may expect slight short-term pain, JMP Group remains a formidable value proposition, with strong supporting growth prospects.
Bottom Line
JMP Group is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Boasting a good industry rank and a top Zacks Rank, the company deserves attention right now. So, it might pay for value investors to delve deeper into the company’s prospects, as fundamentals indicate that this stock could be a compelling pick.
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Is JMP Group a Great Stock for Value Investors?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put JMP Group Inc. stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, JMP Group has a trailing twelve months PE ratio of 41.00, as you can see in the chart below:
This level actually is not pretty favorably with the market at large, as the PE for the S&P 500 compares in at about 19.84. If we focus on the stock’s long-term PE trend, the current level puts JMP Group’s current PE ratio above its midpoint over the past five years, with the number having risen rapidly over the past few months.
Further, the stock’s PE also does not compare favorably with the Zacks classified Finance-Investment Brokers industry’s trailing twelve months PE ratio, which stands at 18.71. At the very least, this indicates that the stock is relatively overvalued right now, compared to its peers.
However, we should also point out that JMP Group has a forward PE ratio (price relative to this year’s earnings) of just 13.67, so it is fair to say that a slightly more value-oriented path may be ahead for JMP Group stock in the near term.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, JMP Group has a P/S ratio of about 1.2. This is a bit lower than the S&P 500 average, which comes in at nearly 3 right now. Also, as we can see in the chart below, this is well below the highs for this stock in particular over the past few years.
If anything, JMP is in the lower end of its range in the time period from a P/S metric, suggesting some level of undervalued trading—at least compared to historical norms.
Broad Value Outlook
In aggregate, JMP Group currently has a Zacks Value Style Score of ‘A’, putting it into the top 20% of all stocks we cover from this look. This makes JMP a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, its P/CF ratio (another great indicator of value) comes in at 3.73, which is far better than the industry average of 4.44. Clearly, JMP is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though JMP Group might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘C’ and a Momentum score of ‘B’. This gives JMP a Zacks VGM score—or its overarching fundamental grade—of ‘A’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been mixed at best. The current quarter has seen no estimates go higher in the past sixty days compared to one lower, while the full year estimate has seen one up and no down in the same time period.
This has had a mixed impact on the consensus estimate as well, as the current quarter consensus estimate has fallen by 23.1% in the past two months, while the full year estimate has gone up by 12.5%. You can see the consensus estimate trend and recent price actionfor the stock in the chart below:
JMP GROUP INC Price and Consensus
JMP GROUP INC Price and Consensus | JMP GROUP INC Quote
This mixed trend indicates that while the stock’s growth story is intact over the medium term, analysts have some apprehensions about the stock in the immediate future.
Also consider the fact that the company boasts a Zacks Rank #2 (Buy), which indicates robust fundamentals and expectations of outperformance in the near term. Thus, we can say that while investors may expect slight short-term pain, JMP Group remains a formidable value proposition, with strong supporting growth prospects.
Bottom Line
JMP Group is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Boasting a good industry rank and a top Zacks Rank, the company deserves attention right now. So, it might pay for value investors to delve deeper into the company’s prospects, as fundamentals indicate that this stock could be a compelling pick.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>