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Should Value Investors Buy China Mobile (CHL) 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.

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.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

China Mobile (CHL - Free Report) is a stock many investors are watching right now. CHL is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 6.60. This compares to its industry's average Forward P/E of 11.90. Over the last 12 months, CHL's Forward P/E has been as high as 10.97 and as low as 6.28, with a median of 8.61.

Investors should also note that CHL holds a PEG ratio of 0.79. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CHL's PEG compares to its industry's average PEG of 1.05. CHL's PEG has been as high as 3.30 and as low as 0.75, with a median of 1.43, all within the past year.

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


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