Back to top

Image: Bigstock

Are Investors Undervaluing KT (KT) Right Now?

Read MoreHide Full Article

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.

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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

KT (KT - Free Report) is a stock many investors are watching right now. KT is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A.

We should also highlight that KT has a P/B ratio of 0.56. 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 stock's P/B looks solid versus its industry's average P/B of 1.46. KT's P/B has been as high as 0.56 and as low as 0.40, with a median of 0.49, over the past year.

Finally, investors should note that KT has a P/CF ratio of 1.82. 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 stock's P/CF looks attractive against its industry's average P/CF of 1.87. Over the past year, KT's P/CF has been as high as 1.82 and as low as 1.33, with a median of 1.52.

SK Telecom Co. (SKM - Free Report) may be another strong Wireless Non-US stock to add to your shortlist. SKM is a # 1 (Strong Buy) stock with a Value grade of A.

Additionally, SK Telecom Co. has a P/B ratio of 1.10 while its industry's price-to-book ratio sits at 1.46. For SKM, this valuation metric has been as high as 1.25, as low as 0.86, with a median of 1.04 over the past year.

These figures are just a handful of the metrics value investors tend to look at, but they help show that KT and SK Telecom Co. are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, KT and SKM feels like a great value stock at the moment.

See More Zacks Research for These Tickers

Normally $25 each - click below to receive one report FREE:

SK Telecom Co., Ltd. (SKM) - free report >>

KT Corporation (KT) - free report >>

Published in