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Is Radian (RDN) a Great Value Stock Right Now?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 Radian (RDN - Free Report) . RDN is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 7.60, which compares to its industry's average of 10.15. RDN's Forward P/E has been as high as 11.87 and as low as 5.88, with a median of 7.74, all within the past year.

Investors should also recognize that RDN has a P/B ratio of 1.35. 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 stock's P/B looks solid versus its industry's average P/B of 1.50. RDN's P/B has been as high as 1.67 and as low as 1.01, with a median of 1.36, over the past year.

Finally, our model also underscores that RDN has a P/CF ratio of 6.59. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 9.66. Over the past 52 weeks, RDN's P/CF has been as high as 20.04 and as low as 5.24, with a median of 9.91.

These are only a few of the key metrics included in Radian'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, RDN looks like an impressive value stock at the moment.




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