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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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.
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.
One company to watch right now is HSBC (HSBC - Free Report) . HSBC is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 5.23, while its industry has an average P/E of 7.06. Over the past year, HSBC's Forward P/E has been as high as 9.12 and as low as 5.22, with a median of 5.99.
Investors will also notice that HSBC has a PEG ratio of 0.24. 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. HSBC's PEG compares to its industry's average PEG of 0.58. Within the past year, HSBC's PEG has been as high as 0.42 and as low as 0.24, with a median of 0.31.
Another valuation metric that we should highlight is HSBC's P/B ratio of 0.79. 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 solid versus its industry's average P/B of 1.42. Within the past 52 weeks, HSBC's P/B has been as high as 0.89 and as low as 0.54, with a median of 0.72.
Finally, we should also recognize that HSBC has a P/CF ratio of 5.60. 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 12.91. Within the past 12 months, HSBC's P/CF has been as high as 8.39 and as low as 5.18, with a median of 6.59.
Value investors will likely look at more than just these metrics, but the above data helps show that HSBC is likely undervalued currently. And when considering the strength of its earnings outlook, HSBC sticks out at as one of the market's strongest value stocks.
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Are Investors Undervaluing HSBC (HSBC) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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.
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.
One company to watch right now is HSBC (HSBC - Free Report) . HSBC is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 5.23, while its industry has an average P/E of 7.06. Over the past year, HSBC's Forward P/E has been as high as 9.12 and as low as 5.22, with a median of 5.99.
Investors will also notice that HSBC has a PEG ratio of 0.24. 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. HSBC's PEG compares to its industry's average PEG of 0.58. Within the past year, HSBC's PEG has been as high as 0.42 and as low as 0.24, with a median of 0.31.
Another valuation metric that we should highlight is HSBC's P/B ratio of 0.79. 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 solid versus its industry's average P/B of 1.42. Within the past 52 weeks, HSBC's P/B has been as high as 0.89 and as low as 0.54, with a median of 0.72.
Finally, we should also recognize that HSBC has a P/CF ratio of 5.60. 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 12.91. Within the past 12 months, HSBC's P/CF has been as high as 8.39 and as low as 5.18, with a median of 6.59.
Value investors will likely look at more than just these metrics, but the above data helps show that HSBC is likely undervalued currently. And when considering the strength of its earnings outlook, HSBC sticks out at as one of the market's strongest value stocks.