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Are Investors Undervaluing These Finance Stocks 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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 company to watch right now is Fidelity National Financial (FNF - Free Report) . FNF is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. FNF has a P/S ratio of 0.98. This compares to its industry's average P/S of 1.

Finally, we should also recognize that FNF has a P/CF ratio of 4.31. 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. FNF's P/CF compares to its industry's average P/CF of 5.32. Within the past 12 months, FNF's P/CF has been as high as 9.59 and as low as 3.87, with a median of 5.06.

If you're looking for another solid Insurance - Property and Casualty value stock, take a look at The Travelers Companies (TRV - Free Report) . TRV is a # 2 (Buy) stock with a Value score of A.

Shares of The Travelers Companies are currently trading at a forward earnings multiple of 12.15 and a PEG ratio of 1.87 compared to its industry's P/E and PEG ratios of 28.80 and 3.31, respectively.

TRV's price-to-earnings ratio has been as high as 14.16 and as low as 11.52, with a median of 12.81, while its PEG ratio has been as high as 2.27 and as low as 1.77, with a median of 2.02, all within the past year.

Furthermore, The Travelers Companies holds a P/B ratio of 1.33 and its industry's price-to-book ratio is 1.28. TRV's P/B has been as high as 1.44, as low as 1.17, with a median of 1.34 over the past 12 months.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Fidelity National Financial and The Travelers Companies are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, FNF and TRV feels like a great value stock at the moment.


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The Travelers Companies, Inc. (TRV) - free report >>

Fidelity National Financial, Inc. (FNF) - free report >>

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