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Should Value Investors Buy Federated Hermes (FHI) Stock?

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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.

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.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company to watch right now is Federated Hermes (FHI - Free Report) . FHI is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 10.17. This compares to its industry's average Forward P/E of 12.12. 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 9.89.

Investors should also note that FHI holds a PEG ratio of 0.82. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. FHI's PEG compares to its industry's average PEG of 1.63. Over the last 12 months, FHI's PEG has been as high as 2.25 and as low as 0.52, with a median of 0.99.

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. FHI has a P/S ratio of 2.07. This compares to its industry's average P/S of 2.91.

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

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