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Should Value Investors Buy KT (KT) 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 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.

One company to watch right now is KT (KT - Free Report) . KT is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 8.09. This compares to its industry's average Forward P/E of 11.07. Over the past year, KT's Forward P/E has been as high as 18.18 and as low as 6.09, with a median of 7.28.

Another valuation metric that we should highlight is KT's P/B ratio of 0.81. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. KT's current P/B looks attractive when compared to its industry's average P/B of 1.20. Over the past year, KT's P/B has been as high as 0.86 and as low as 0.57, with a median of 0.71.

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. KT has a P/S ratio of 0.55. This compares to its industry's average P/S of 1.26.

Finally, investors will want to recognize that KT has a P/CF ratio of 3.10. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. KT's current P/CF looks attractive when compared to its industry's average P/CF of 5.21. Over the past year, KT's P/CF has been as high as 3.27 and as low as 1.85, with a median of 2.67.

Another great Wireless Non-US stock you could consider is Vodafone Group (VOD - Free Report) , which is a Zacks Rank of #2 (Buy) stock with a Value Score of A.

Vodafone Group is trading at a forward earnings multiple of 10.36 at the moment, with a PEG ratio of 0.51. This compares to its industry's average P/E of 11.07 and average PEG ratio of 0.52.

Over the past year, VOD's P/E has been as high as 12.50, as low as 8.12, with a median of 9.80; its PEG ratio has been as high as 6.19, as low as 0.43, with a median of 0.57 during the same time period.

Vodafone Group also has a P/B ratio of 0.49 compared to its industry's price-to-book ratio of 1.20. Over the past year, its P/B ratio has been as high as 0.51, as low as 0.31, with a median of 0.38.

These figures are just a handful of the metrics value investors tend to look at, but they help show that KT and Vodafone Group are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, KT and VOD feels like a great value stock at the moment.


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