Back to top

Image: Bigstock

Are Investors Undervaluing Bank of Communications Co. (BCMXY) Right Now?

Read MoreHide Full Article

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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.

Bank of Communications Co. (BCMXY - Free Report) is a stock many investors are watching right now. BCMXY is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock holds a P/E ratio of 5.38, while its industry has an average P/E of 10.81. Over the last 12 months, BCMXY's Forward P/E has been as high as 6.13 and as low as 5.35, with a median of 5.88.

Another valuation metric that we should highlight is BCMXY's P/B ratio of 0.39. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 0.97. Within the past 52 weeks, BCMXY's P/B has been as high as 0.45 and as low as 0.31, with a median of 0.37.

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. BCMXY has a P/S ratio of 0.74. This compares to its industry's average P/S of 1.74.

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

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Bank of Communications Co. (BCMXY) - free report >>

Published in