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Is Stewart Information Services (STC) Stock Undervalued 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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 Stewart Information Services (STC - Free Report) . STC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Investors should also recognize that STC has a P/B ratio of 1.01. Investors use the P/B ratio to look at a stock's market value versus 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 1.21. Over the past 12 months, STC's P/B has been as high as 1.77 and as low as 0.94, with a median of 1.41.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. STC has a P/S ratio of 0.4. This compares to its industry's average P/S of 0.97.

Finally, investors should note that STC has a P/CF ratio of 3.65. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. STC's current P/CF looks attractive when compared to its industry's average P/CF of 6.45. Within the past 12 months, STC's P/CF has been as high as 6.63 and as low as 3.37, with a median of 5.37.

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 12.05 and a PEG ratio of 3.49 compared to its industry's P/E and PEG ratios of 26.90 and 2.22, respectively.

TRV's Forward P/E has been as high as 14.05 and as low as 11.40, with a median of 12.66. During the same time period, its PEG ratio has been as high as 4.49, as low as 1.77, with a median of 2.05.

Furthermore, The Travelers Companies holds a P/B ratio of 1.59 and its industry's price-to-book ratio is 1.21. TRV's P/B has been as high as 1.74, as low as 1.26, with a median of 1.38 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 Stewart Information Services and The Travelers Companies are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, STC and TRV feels like a great value stock at the moment.


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

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