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Are Investors Undervaluing Deutsche Bank (DB) Right Now?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 stock to keep an eye on is Deutsche Bank (DB - Free Report) . DB is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 5.53, which compares to its industry's average of 8.01. Over the last 12 months, DB's Forward P/E has been as high as 6.75 and as low as 4.74, with a median of 5.34.

Investors will also notice that DB has a PEG ratio of 0.69. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. DB's industry has an average PEG of 0.76 right now. Over the past 52 weeks, DB's PEG has been as high as 1.01 and as low as 0.56, with a median of 0.67.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. DB has a P/S ratio of 0.42. This compares to its industry's average P/S of 1.17.

These are just a handful of the figures considered in Deutsche Bank'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 DB is an impressive value stock right now.


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