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Are Investors Undervaluing Axa (AXAHY) 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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

One stock to keep an eye on is Axa (AXAHY - Free Report) . AXAHY is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 6.98 right now. For comparison, its industry sports an average P/E of 9.81. Over the past year, AXAHY's Forward P/E has been as high as 9.49 and as low as 6.59, with a median of 8.11.

We also note that AXAHY holds a PEG ratio of 0.90. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. AXAHY's industry currently sports an average PEG of 1.24. AXAHY's PEG has been as high as 1.30 and as low as 0.36, with a median of 0.64, all within the past year.

Investors could also keep in mind MGIC Investment (MTG - Free Report) , an Insurance - Multi line stock with a Zacks Rank of # 2 (Buy) and Value grade of A.

MGIC Investment is currently trading with a Forward P/E ratio of 6.14 while its PEG ratio sits at 1.23. Both of the company's metrics compare favorably to its industry's average P/E of 9.81 and average PEG ratio of 1.24.

Over the past year, MTG's P/E has been as high as 8.56, as low as 5.06, with a median of 6.83; its PEG ratio has been as high as 1.71, as low as 1.01, with a median of 0.64 during the same time period.

MGIC Investment also has a P/B ratio of 0.96 compared to its industry's price-to-book ratio of 2.18. Over the past year, its P/B ratio has been as high as 1.11, as low as 0.77, with a median of 0.96.

These are only a few of the key metrics included in Axa and MGIC Investment strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, AXAHY and MTG look like an impressive value stock at the moment.


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