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Are Investors Undervaluing Radian Group (RDN) 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.
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.
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 company to watch right now is Radian Group (RDN - Free Report) . RDN 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 5.80 right now. For comparison, its industry sports an average P/E of 9.99. Over the last 12 months, RDN's Forward P/E has been as high as 7.75 and as low as 5.53, with a median of 6.47.
We also note that RDN holds a PEG ratio of 1.16. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. RDN's PEG compares to its industry's average PEG of 1.64. RDN's PEG has been as high as 1.55 and as low as 1.11, with a median of 1.29, all within the past year.
Finally, investors will want to recognize that RDN has a P/CF ratio of 3.74. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 9.82. Over the past year, RDN's P/CF has been as high as 6.59 and as low as 3.64, with a median of 5.22.
These are just a handful of the figures considered in Radian Group's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that RDN is an impressive value stock right now.