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Are Investors Undervaluing The Hanover Insurance Group (THG) Right Now?
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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 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 The Hanover Insurance Group (THG - Free Report) . THG is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 10.86. This compares to its industry's average Forward P/E of 25.46. Over the last 12 months, THG's Forward P/E has been as high as 13.52 and as low as 10.12, with a median of 11.25.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. THG has a P/S ratio of 0.9. This compares to its industry's average P/S of 1.27.
Finally, we should also recognize that THG has a P/CF ratio of 11.21. 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. This stock's P/CF looks attractive against its industry's average P/CF of 11.29. THG's P/CF has been as high as 19.14 and as low as 10.39, with a median of 13.62, all within the past year.
Universal Insurance Holdings (UVE - Free Report) may be another strong Insurance - Property and Casualty stock to add to your shortlist. UVE is a Zacks Rank of #1 (Strong Buy) stock with a Value grade of A.
Universal Insurance Holdings sports a P/B ratio of 1.58 as well; this compares to its industry's price-to-book ratio of 1.37. In the past 52 weeks, UVE's P/B has been as high as 1.89, as low as 1.19, with a median of 1.54.
These are only a few of the key metrics included in The Hanover Insurance Group and Universal Insurance Holdings strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, THG and UVE look like an impressive value stock at the moment.
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Are Investors Undervaluing The Hanover Insurance Group (THG) Right Now?
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 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 The Hanover Insurance Group (THG - Free Report) . THG is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 10.86. This compares to its industry's average Forward P/E of 25.46. Over the last 12 months, THG's Forward P/E has been as high as 13.52 and as low as 10.12, with a median of 11.25.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. THG has a P/S ratio of 0.9. This compares to its industry's average P/S of 1.27.
Finally, we should also recognize that THG has a P/CF ratio of 11.21. 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. This stock's P/CF looks attractive against its industry's average P/CF of 11.29. THG's P/CF has been as high as 19.14 and as low as 10.39, with a median of 13.62, all within the past year.
Universal Insurance Holdings (UVE - Free Report) may be another strong Insurance - Property and Casualty stock to add to your shortlist. UVE is a Zacks Rank of #1 (Strong Buy) stock with a Value grade of A.
Universal Insurance Holdings sports a P/B ratio of 1.58 as well; this compares to its industry's price-to-book ratio of 1.37. In the past 52 weeks, UVE's P/B has been as high as 1.89, as low as 1.19, with a median of 1.54.
These are only a few of the key metrics included in The Hanover Insurance Group and Universal Insurance Holdings strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, THG and UVE look like an impressive value stock at the moment.