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 LegacyTexas Financial 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, LegacyTexas Financial has a trailing twelve months PE ratio of 18.8, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 stands at about 21.3. If we focus on the long-term PE trend, LegacyTexas Financial’s current PE level puts it below its midpoint over the past five years.
Further, the stock’s PE also compares favorably with the Zacks Financial - Savings and Loan industry’s trailing twelve months PE ratio, which stands at 18.9. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that LegacyTexas Financial has a forward PE ratio (price relative to this year’s earnings) of just 18.5, so it is fair to say that a slightly more value-oriented path may be ahead for LegacyTexas Financial stock in the near term too.
PEG Ratio
While earnings are certainly important, it is essential to know how much you are paying for the growth of earnings as well. One can easily do that with the PEG ratio (ratio of the P/E to the expected future earnings growth rate).The PEG ratio gives a more complete picture of the valuation of a stock than the P/E ratio.
LegacyTexas Financial’s PEG ratio stands at just 1.3, compared with the industry average of 1.7. This suggests a slightly undervalued trading relative to its earnings growth potential right now.
Broad Value Outlook
In aggregate, LegacyTexas Financial currently has a Value Score of B, putting it into the top 40% of all stocks we cover from this look. This makes LegacyTexas Financial a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, the PEG ratio for LegacyTexas Financial is just 1.5, a level that is far lower than the industry average of 2. The PEG ratio is a modified PE ratio that takes into account the stock’s earnings growth rate. Clearly, LTXB is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though LegacyTexas Financial 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 Score of C and a Momentum Score of A. This gives LTXB a Zacks VGM score — or its overarching fundamental grade — of B. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been pretty encouraging. The current quarter has seen three estimates go higher in the past sixty days compared to no lower, while the full year estimate has seen three up and one down in the same time period.
This has had just a small impact on the consensus estimate though as the current quarter consensus estimate has risen by 3.3% in the past two months, while the full year estimate has inched up by 0.5%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
LegacyTexas Financial Group, Inc. Price and Consensus
Despite this bullish trend, the stock has just a Zacks Rank #3 (Hold) and that is why we are looking for better performance from the company in the near term.
Bottom Line
LegacyTexas Financial is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Moreover, a strong industry rank (Top 31% out of more than 250 industries) further strengthens its growth potential . In fact, over the past three years, the industry has clearly outperformed the broader market, as you can see below:
So, despite a Zacks Rank #3, we believe that bullish analyst sentiment and favorable industry factors make this value stock a compelling pick.
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Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
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Should Value Investors Consider LegacyTexas Financial (LTXB) Stock?
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 LegacyTexas Financial 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, LegacyTexas Financial has a trailing twelve months PE ratio of 18.8, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 stands at about 21.3. If we focus on the long-term PE trend, LegacyTexas Financial’s current PE level puts it below its midpoint over the past five years.
Further, the stock’s PE also compares favorably with the Zacks Financial - Savings and Loan industry’s trailing twelve months PE ratio, which stands at 18.9. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that LegacyTexas Financial has a forward PE ratio (price relative to this year’s earnings) of just 18.5, so it is fair to say that a slightly more value-oriented path may be ahead for LegacyTexas Financial stock in the near term too.
PEG Ratio
While earnings are certainly important, it is essential to know how much you are paying for the growth of earnings as well. One can easily do that with the PEG ratio (ratio of the P/E to the expected future earnings growth rate).The PEG ratio gives a more complete picture of the valuation of a stock than the P/E ratio.
LegacyTexas Financial’s PEG ratio stands at just 1.3, compared with the industry average of 1.7. This suggests a slightly undervalued trading relative to its earnings growth potential right now.
Broad Value Outlook
In aggregate, LegacyTexas Financial currently has a Value Score of B, putting it into the top 40% of all stocks we cover from this look. This makes LegacyTexas Financial a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, the PEG ratio for LegacyTexas Financial is just 1.5, a level that is far lower than the industry average of 2. The PEG ratio is a modified PE ratio that takes into account the stock’s earnings growth rate. Clearly, LTXB is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though LegacyTexas Financial 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 Score of C and a Momentum Score of A. This gives LTXB a Zacks VGM score — or its overarching fundamental grade — of B. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been pretty encouraging. The current quarter has seen three estimates go higher in the past sixty days compared to no lower, while the full year estimate has seen three up and one down in the same time period.
This has had just a small impact on the consensus estimate though as the current quarter consensus estimate has risen by 3.3% in the past two months, while the full year estimate has inched up by 0.5%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
LegacyTexas Financial Group, Inc. Price and Consensus
LegacyTexas Financial Group, Inc. Price and Consensus | LegacyTexas Financial Group, Inc. Quote
Despite this bullish trend, the stock has just a Zacks Rank #3 (Hold) and that is why we are looking for better performance from the company in the near term.
Bottom Line
LegacyTexas Financial is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Moreover, a strong industry rank (Top 31% out of more than 250 industries) further strengthens its growth potential . In fact, over the past three years, the industry has clearly outperformed the broader market, as you can see below:
So, despite a Zacks Rank #3, we believe that bullish analyst sentiment and favorable industry factors make this value stock a compelling pick.
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
Click here to see them >>