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Should Value Investors Buy China Life (LFC) 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.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

China Life (LFC - Free Report) is a stock many investors are watching right now. LFC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Investors should also recognize that LFC has a P/B ratio of 1.16. The P/B ratio pits a stock's market value against 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 1.32. Over the past year, LFC's P/B has been as high as 1.40 and as low as 0.81, with a median of 1.17.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. LFC has a P/S ratio of 0.64. This compares to its industry's average P/S of 0.65.

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


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