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Should Value Investors Buy Grupo Financiero Banorte (GBOOY) 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, 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 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.

Grupo Financiero Banorte (GBOOY - Free Report) is a stock many investors are watching right now. GBOOY is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 8.13 right now. For comparison, its industry sports an average P/E of 17.99. Over the past year, GBOOY's Forward P/E has been as high as 8.29 and as low as 5.98, with a median of 6.75.

We also note that GBOOY holds a PEG ratio of 0.95. 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. GBOOY's industry currently sports an average PEG of 1.08. Over the past 52 weeks, GBOOY's PEG has been as high as 0.97 and as low as 0.61, with a median of 0.73.

Investors should also recognize that GBOOY has a P/B ratio of 1.91. 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 company's current P/B looks solid when compared to its industry's average P/B of 3.37. GBOOY's P/B has been as high as 1.91 and as low as 1.29, with a median of 1.49, over the past year.

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


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