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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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.
First American Financial (FAF - Free Report) is a stock many investors are watching right now. FAF is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
Another notable valuation metric for FAF is its P/B ratio of 1.22. 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 1.24. Within the past 52 weeks, FAF's P/B has been as high as 1.54 and as low as 1.16, with a median of 1.42.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. FAF has a P/S ratio of 0.78. This compares to its industry's average P/S of 1.02.
Finally, we should also recognize that FAF has a P/CF ratio of 4.93. 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. FAF's current P/CF looks attractive when compared to its industry's average P/CF of 6.73. Over the past 52 weeks, FAF's P/CF has been as high as 7.42 and as low as 4.93, with a median of 6.10.
If you're looking for another solid Insurance - Property and Casualty value stock, take a look at Selective Insurance Group (SIGI - Free Report) . SIGI is a # 2 (Buy) stock with a Value score of A.
Shares of Selective Insurance Group are currently trading at a forward earnings multiple of 14.12 and a PEG ratio of 1.23 compared to its industry's P/E and PEG ratios of 29.24 and 2.81, respectively.
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Are These Finance Stocks Undervalued Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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.
First American Financial (FAF - Free Report) is a stock many investors are watching right now. FAF is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
Another notable valuation metric for FAF is its P/B ratio of 1.22. 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 1.24. Within the past 52 weeks, FAF's P/B has been as high as 1.54 and as low as 1.16, with a median of 1.42.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. FAF has a P/S ratio of 0.78. This compares to its industry's average P/S of 1.02.
Finally, we should also recognize that FAF has a P/CF ratio of 4.93. 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. FAF's current P/CF looks attractive when compared to its industry's average P/CF of 6.73. Over the past 52 weeks, FAF's P/CF has been as high as 7.42 and as low as 4.93, with a median of 6.10.
If you're looking for another solid Insurance - Property and Casualty value stock, take a look at Selective Insurance Group (SIGI - Free Report) . SIGI is a # 2 (Buy) stock with a Value score of A.
Shares of Selective Insurance Group are currently trading at a forward earnings multiple of 14.12 and a PEG ratio of 1.23 compared to its industry's P/E and PEG ratios of 29.24 and 2.81, respectively.