Back to top

Are Investors Undervaluing CM Finance (CMFN) Right Now?

Read MoreHide Full Article

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

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.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One stock to keep an eye on is CM Finance (CMFN - Free Report) . CMFN is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 6.97, while its industry has an average P/E of 10.09. CMFN's Forward P/E has been as high as 9.12 and as low as 5.59, with a median of 7.84, all within the past year.

We should also highlight that CMFN has a P/B ratio of 0.64. 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 1.06. Over the past year, CMFN's P/B has been as high as 0.79 and as low as 0.48, with a median of 0.68.

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. CMFN has a P/S ratio of 2.31. This compares to its industry's average P/S of 5.15.

These are just a handful of the figures considered in CM Finance's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that CMFN is an impressive value stock right now.




In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


CM Finance Inc (CMFN) - free report >>

More from Zacks Tale of the Tape

You May Like

Published in