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Should Value Investors Buy Popular (BPOP) Stock?

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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, 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.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company value investors might notice is Popular (BPOP - Free Report) . BPOP is currently sporting a Zacks Rank #1 (Strong Buy) and an A for Value. The stock has a Forward P/E ratio of 9.32. This compares to its industry's average Forward P/E of 10.50. Over the last 12 months, BPOP's Forward P/E has been as high as 11.26 and as low as 7.81, with a median of 9.38.

BPOP is also sporting a PEG ratio of 0.58. 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. BPOP's industry has an average PEG of 1.37 right now. BPOP's PEG has been as high as 0.92 and as low as 0.50, with a median of 0.62, all within the past year.

Another valuation metric that we should highlight is BPOP's P/B ratio of 1.29. The P/B ratio is used to compare a stock's market value with 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 1.78. Over the past year, BPOP's P/B has been as high as 1.41 and as low as 0.98, with a median of 1.24.

Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. BPOP has a P/S ratio of 1.7. This compares to its industry's average P/S of 2.

These are only a few of the key metrics included in Popular's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, BPOP looks like an impressive value stock at the moment.


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