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Is Old Republic International (ORI) 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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

One stock to keep an eye on is Old Republic International (ORI - Free Report) . ORI is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

Another notable valuation metric for ORI is its P/B ratio of 1.19. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.62. ORI's P/B has been as high as 1.25 and as low as 0.73, with a median of 0.98, over the past year.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. ORI has a P/S ratio of 0.91. This compares to its industry's average P/S of 1.04.

Finally, our model also underscores that ORI has a P/CF ratio of 5.03. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. ORI's current P/CF looks attractive when compared to its industry's average P/CF of 13.81. Within the past 12 months, ORI's P/CF has been as high as 18.38 and as low as 3.92, with a median of 10.45.

These are only a few of the key metrics included in Old Republic International's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, ORI looks like an impressive value stock at the moment.


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