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Tale of the Tape

Zacks Equity Research

Why China Unicom (CHU) Could Be a Top Value Stock Pick
January 09, 2014


Trades from $3
Value investing is always a very popular strategy, and for good reason. After all, who doesn’t want to find stocks that have low PEs, solid outlooks, and decent dividends?

Fortunately for investors looking for this combination, we have identified a strong candidate which may be an impressive value; China Unicom (Hong Kong) Limited (CHU - Free Report)

China Unicom in Focus

CHU may be an interesting play thanks to its forward PE of 12.8, its P/S ratio of 0.74, and its decent dividend yield of 1.2%. These factors suggest that China Unicom is a pretty good value pick, as investors have to pay a relatively low level for each dollar of earnings, and that CHU has decent revenue metrics to back up its earnings.

But before you think that China Unicom is just a pure value play, it is important to note that it has been seeing solid activity on the earnings estimate front as well. For current year earnings, the consensus has gone up by 1.3% in the past 30 days, thanks to 1 upward revision in the past one months compared to no downward revision.

This estimate strength is actually enough to push CHU to a Zacks Rank #2 (Buy), suggesting it is poised to outperform. So really, China Unicom is looking great from a number of angles thanks to its PE below 20, a P/S ratio below one, and a strong Zacks Rank, meaning that this company could be a great choice for value investors at this time.

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