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Should Value Investors Buy PennyMac Financial (PFSI) Stock?
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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is PennyMac Financial (PFSI - Free Report) . PFSI is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 7.71 right now. For comparison, its industry sports an average P/E of 7.93. Over the past year, PFSI's Forward P/E has been as high as 8.53 and as low as 6.56, with a median of 7.52.
We also note that PFSI holds a PEG ratio of 0.77. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. PFSI's industry has an average PEG of 0.95 right now. Over the past 52 weeks, PFSI's PEG has been as high as 0.85 and as low as 0.66, with a median of 0.75.
Another notable valuation metric for PFSI is its P/B ratio of 1.34. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 2.13. PFSI's P/B has been as high as 1.37 and as low as 0.25, with a median of 1.01, over the past year.
Finally, investors will want to recognize that PFSI has a P/CF ratio of 4.04. 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. PFSI's current P/CF looks attractive when compared to its industry's average P/CF of 12.83. Within the past 12 months, PFSI's P/CF has been as high as 5.70 and as low as 3.01, with a median of 4.25.
These are just a handful of the figures considered in PennyMac Financial'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 PFSI is an impressive value stock right now.
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Should Value Investors Buy PennyMac Financial (PFSI) Stock?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is PennyMac Financial (PFSI - Free Report) . PFSI is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 7.71 right now. For comparison, its industry sports an average P/E of 7.93. Over the past year, PFSI's Forward P/E has been as high as 8.53 and as low as 6.56, with a median of 7.52.
We also note that PFSI holds a PEG ratio of 0.77. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. PFSI's industry has an average PEG of 0.95 right now. Over the past 52 weeks, PFSI's PEG has been as high as 0.85 and as low as 0.66, with a median of 0.75.
Another notable valuation metric for PFSI is its P/B ratio of 1.34. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 2.13. PFSI's P/B has been as high as 1.37 and as low as 0.25, with a median of 1.01, over the past year.
Finally, investors will want to recognize that PFSI has a P/CF ratio of 4.04. 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. PFSI's current P/CF looks attractive when compared to its industry's average P/CF of 12.83. Within the past 12 months, PFSI's P/CF has been as high as 5.70 and as low as 3.01, with a median of 4.25.
These are just a handful of the figures considered in PennyMac Financial'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 PFSI is an impressive value stock right now.