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Should Value Investors Buy Jefferies (JEF) Stock?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

Jefferies (JEF - Free Report) is a stock many investors are watching right now. JEF is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 9.85. This compares to its industry's average Forward P/E of 10.49. Over the past year, JEF's Forward P/E has been as high as 19.54 and as low as 9.27, with a median of 9.83.

We also note that JEF holds a PEG ratio of 1.01. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. JEF's PEG compares to its industry's average PEG of 1.09. Over the last 12 months, JEF's PEG has been as high as 1.09 and as low as 1, with a median of 1.03.

Investors should also recognize that JEF has a P/B ratio of 0.74. The P/B ratio pits a stock's market value against 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 2. Over the past year, JEF's P/B has been as high as 0.98 and as low as 0.71, with a median of 0.84.

Finally, our model also underscores that JEF has a P/CF ratio of 10.35. 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 stock's P/CF looks attractive against its industry's average P/CF of 10.46. JEF's P/CF has been as high as 50.56 and as low as 9.95, with a median of 13.16, all within the past year.

These are just a handful of the figures considered in Jefferies's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that JEF is an impressive value stock right now.


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