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Are Investors Undervaluing Hallmark Financial (HALL) Right Now?

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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 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.

Hallmark Financial (HALL - Free Report) is a stock many investors are watching right now. HALL is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 9.03, which compares to its industry's average of 24.15. HALL's Forward P/E has been as high as 13.38 and as low as 8.70, with a median of 11.35, all within the past year.

We should also highlight that HALL has a P/B ratio of 0.74. 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 1.49. Over the past 12 months, HALL's P/B has been as high as 0.79 and as low as 0.64, with a median of 0.73.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. HALL has a P/S ratio of 0.5. This compares to its industry's average P/S of 1.18.

Finally, we should also recognize that HALL has a P/CF ratio of 12.28. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 33.10. HALL's P/CF has been as high as 21.29 and as low as -134.13, with a median of -14.27, all within the past year.

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


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