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Is Federated Hermes (FHI) Stock Undervalued Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

One stock to keep an eye on is Federated Hermes (FHI - Free Report) . FHI is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 9.99 right now. For comparison, its industry sports an average P/E of 12.21. Over the past year, FHI's Forward P/E has been as high as 12.71 and as low as 5.18, with a median of 9.99.

We also note that FHI holds a PEG ratio of 0.81. 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 currently sports an average PEG of 1.64. Within the past year, FHI's PEG has been as high as 2.25 and as low as 0.52, with a median of 1.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. FHI has a P/S ratio of 1.9. This compares to its industry's average P/S of 2.27.

Value investors will likely look at more than just these metrics, but the above data helps show that Federated Hermes is likely undervalued currently. And when considering the strength of its earnings outlook, FHI sticks out at as one of the market's strongest value stocks.

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