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Is Barclays (BCS) Stock Undervalued Right Now?

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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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

Barclays (BCS - Free Report) is a stock many investors are watching right now. BCS is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 7.17, which compares to its industry's average of 9.97. Over the last 12 months, BCS's Forward P/E has been as high as 7.48 and as low as 5.59, with a median of 6.51.

Another notable valuation metric for BCS is its P/B ratio of 0.45. The P/B ratio is used to compare a stock's market value with 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 1.34. BCS's P/B has been as high as 0.46 and as low as 0.32, with a median of 0.40, over the past year.

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. BCS has a P/S ratio of 1.38. This compares to its industry's average P/S of 1.75.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Barclays is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BCS feels like a great value stock at the moment.


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