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Are Investors Undervaluing Federated Hermes (FHI) Right Now?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 value investors might notice is Federated Hermes (FHI - Free Report) . FHI is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 9.54, while its industry has an average P/E of 12.53. Over the last 12 months, FHI's Forward P/E has been as high as 12.71 and as low as 5.18, with a median of 11.09.

Investors should also note that FHI holds a PEG ratio of 0.96. 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. FHI's industry has an average PEG of 1.68 right now. Over the past 52 weeks, FHI's PEG has been as high as 2.25 and as low as 0.52, with a median of 1.13.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. FHI has a P/S ratio of 1.68. This compares to its industry's average P/S of 1.94.

These are only a few of the key metrics included in Federated Hermes's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, FHI looks like an impressive value stock at the moment.


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