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Are These Finance Stocks Undervalued Right Now?

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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.

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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

Fidelity National Financial (FNF - Free Report) is a stock many investors are watching right now. FNF is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

Another notable valuation metric for FNF is its P/B ratio of 1.38. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. FNF's current P/B looks attractive when compared to its industry's average P/B of 1.40. Within the past 52 weeks, FNF's P/B has been as high as 1.70 and as low as 1.30, with a median of 1.53.

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. FNF has a P/S ratio of 0.87. This compares to its industry's average P/S of 1.05.

Finally, investors will want to recognize that FNF has a P/CF ratio of 3.88. 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 6.62. Within the past 12 months, FNF's P/CF has been as high as 7.19 and as low as 3.87, with a median of 4.67.

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

Additionally, Markel has a P/B ratio of 1.23 while its industry's price-to-book ratio sits at 1.40. For MKL, this valuation metric has been as high as 1.36, as low as 1.21, with a median of 1.28 over the past year.

These are only a few of the key metrics included in Fidelity National Financial and Markel strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, FNF and MKL look like an impressive value stock at the moment.


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Markel Group Inc. (MKL) - free report >>

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