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Is Hilltop Holdings (HTH) 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.

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.

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 Hilltop Holdings (HTH - Free Report) . HTH is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

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. HTH has a P/S ratio of 1.29. This compares to its industry's average P/S of 3.01.

Finally, investors should note that HTH has a P/CF ratio of 6.32. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 11. Within the past 12 months, HTH's P/CF has been as high as 8.04 and as low as 4.67, with a median of 5.82.

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


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