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Is Radian Group (RDN) Stock Undervalued Right Now?
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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company to watch right now is Radian Group (RDN - Free Report) . RDN is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock has a Forward P/E ratio of 6.20. This compares to its industry's average Forward P/E of 9.04. Over the last 12 months, RDN's Forward P/E has been as high as 7.93 and as low as 5.53, with a median of 6.68.
Another valuation metric that we should highlight is RDN's P/B ratio of 0.87. The P/B ratio pits a stock's market value against 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 2.13. RDN's P/B has been as high as 1.07 and as low as 0.76, with a median of 0.94, over the past year.
Finally, investors should note that RDN has a P/CF ratio of 4.76. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 9.43. Within the past 12 months, RDN's P/CF has been as high as 7.33 and as low as 4.30, with a median of 5.48.
These are only a few of the key metrics included in Radian Group's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, RDN looks like an impressive value stock at the moment.