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Should Value Investors Buy Waddell & Reed Financial (WDR) 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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 value investors might notice is Waddell & Reed Financial . WDR is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 9.94, while its industry has an average P/E of 12.42. Over the past year, WDR's Forward P/E has been as high as 14.35 and as low as 8.27, with a median of 9.60.

Another valuation metric that we should highlight is WDR's P/B ratio of 1.93. 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 stock's P/B looks solid versus its industry's average P/B of 2. WDR's P/B has been as high as 2.24 and as low as 1.65, with a median of 1.87, over the past year.

Finally, investors should note that WDR has a P/CF ratio of 8.73. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 15.46. Over the past year, WDR's P/CF has been as high as 12.27 and as low as 7.48, with a median of 9.62.

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