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Should Value Investors Buy KB Financial Group (KB) Stock?

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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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

KB Financial Group (KB - Free Report) is a stock many investors are watching right now. KB is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 5.42. This compares to its industry's average Forward P/E of 8.39. KB's Forward P/E has been as high as 5.69 and as low as 3.45, with a median of 3.94, all within the past year.

KB is also sporting a PEG ratio of 0.39. 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. KB's PEG compares to its industry's average PEG of 0.81. Over the last 12 months, KB's PEG has been as high as 0.63 and as low as 0.27, with a median of 0.33.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. KB has a P/S ratio of 0.79. This compares to its industry's average P/S of 1.25.

Finally, our model also underscores that KB has a P/CF ratio of 4.84. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. KB's P/CF compares to its industry's average P/CF of 11.36. Over the past year, KB's P/CF has been as high as 5.07 and as low as 3.19, with a median of 3.51.

Shinhan Financial Group Co (SHG - Free Report) may be another strong Banks - Foreign stock to add to your shortlist. SHG is a # 1 (Strong Buy) stock with a Value grade of A.

Shinhan Financial Group Co is currently trading with a Forward P/E ratio of 5.59 while its PEG ratio sits at 0.67. Both of the company's metrics compare favorably to its industry's average P/E of 8.39 and average PEG ratio of 0.81.

Over the last 12 months, SHG's P/E has been as high as 5.75, as low as 3.65, with a median of 4.19, and its PEG ratio has been as high as 2.74, as low as 0.64, with a median of 1.23.

Additionally, Shinhan Financial Group Co has a P/B ratio of 0.42 while its industry's price-to-book ratio sits at 1.49. For SHG, this valuation metric has been as high as 0.43, as low as 0.29, with a median of 0.31 over the past year.

These are only a few of the key metrics included in KB Financial Group and Shinhan Financial Group Co strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, KB and SHG look like an impressive value stock at the moment.


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