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Are Investors Undervaluing Hanover Insurance Group (THG) 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.

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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 Hanover Insurance Group (THG - Free Report) . THG is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 13.52. This compares to its industry's average Forward P/E of 21.63. Over the last 12 months, THG's Forward P/E has been as high as 16.19 and as low as 9.75, with a median of 12.55.

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. THG has a P/S ratio of 0.92. This compares to its industry's average P/S of 0.93.

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


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