Back to top

Image: Bigstock

Should Value Investors Buy Intercorp Financial Services (IFS) Stock?

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.

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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 stock to keep an eye on is Intercorp Financial Services (IFS - Free Report) . IFS is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 5.63, which compares to its industry's average of 12.29. Over the past year, IFS's Forward P/E has been as high as 9.34 and as low as 5.33, with a median of 6.18.

We also note that IFS holds a PEG ratio of 0.49. 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. IFS's PEG compares to its industry's average PEG of 1.11. Within the past year, IFS's PEG has been as high as 0.63 and as low as 0.39, with a median of 0.47.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. IFS has a P/S ratio of 1.73. This compares to its industry's average P/S of 1.88.

Finally, investors will want to recognize that IFS has a P/CF ratio of 5.37. 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. IFS's P/CF compares to its industry's average P/CF of 17.07. Over the past 52 weeks, IFS's P/CF has been as high as 8.47 and as low as 4.85, with a median of 5.90.

Value investors will likely look at more than just these metrics, but the above data helps show that Intercorp Financial Services is likely undervalued currently. And when considering the strength of its earnings outlook, IFS sticks out at as one of the market's strongest value stocks.

See More Zacks Research for These Tickers

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

Intercorp Financial Services Inc. (IFS) - free report >>

Published in