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Are Investors Undervaluing These Finance Stocks Right Now?
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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
BGC Partners is a stock many investors are watching right now. BGCP is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 6.27, while its industry has an average P/E of 14.66. Over the past 52 weeks, BGCP's Forward P/E has been as high as 9.53 and as low as 5.06, with a median of 7.57.
We should also highlight that BGCP has a P/B ratio of 2.41. The P/B ratio is used to compare a stock's market value with 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 2.86. Within the past 52 weeks, BGCP's P/B has been as high as 3.11 and as low as 1.62, with a median of 2.54.
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. BGCP has a P/S ratio of 0.81. This compares to its industry's average P/S of 2.31.
Finally, we should also recognize that BGCP has a P/CF ratio of 8.37. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 18.98. Within the past 12 months, BGCP's P/CF has been as high as 15.19 and as low as 6.35, with a median of 10.52.
Investors could also keep in mind Raymond James Financial (RJF - Free Report) , an Financial - Investment Bank stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Furthermore, Raymond James Financial holds a P/B ratio of 2.72 and its industry's price-to-book ratio is 2.86. RJF's P/B has been as high as 2.72, as low as 1.76, with a median of 2.35 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 BGC Partners and Raymond James Financial are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BGCP and RJF feels like a great value stock at the moment.
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Are Investors Undervaluing These Finance Stocks Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
BGC Partners is a stock many investors are watching right now. BGCP is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 6.27, while its industry has an average P/E of 14.66. Over the past 52 weeks, BGCP's Forward P/E has been as high as 9.53 and as low as 5.06, with a median of 7.57.
We should also highlight that BGCP has a P/B ratio of 2.41. The P/B ratio is used to compare a stock's market value with 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 2.86. Within the past 52 weeks, BGCP's P/B has been as high as 3.11 and as low as 1.62, with a median of 2.54.
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. BGCP has a P/S ratio of 0.81. This compares to its industry's average P/S of 2.31.
Finally, we should also recognize that BGCP has a P/CF ratio of 8.37. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 18.98. Within the past 12 months, BGCP's P/CF has been as high as 15.19 and as low as 6.35, with a median of 10.52.
Investors could also keep in mind Raymond James Financial (RJF - Free Report) , an Financial - Investment Bank stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Furthermore, Raymond James Financial holds a P/B ratio of 2.72 and its industry's price-to-book ratio is 2.86. RJF's P/B has been as high as 2.72, as low as 1.76, with a median of 2.35 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 BGC Partners and Raymond James Financial are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BGCP and RJF feels like a great value stock at the moment.