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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
China Life (LFC - Free Report) is a stock many investors are watching right now. LFC is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.
Investors should also note that LFC holds a PEG ratio of 0.57. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. LFC's PEG compares to its industry's average PEG of 0.97. Over the past 52 weeks, LFC's PEG has been as high as 0.63 and as low as 0.42, with a median of 0.48.
Investors should also recognize that LFC has a P/B ratio of 1.59. 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 company's current P/B looks solid when compared to its industry's average P/B of 1.99. Over the past year, LFC's P/B has been as high as 1.67 and as low as 1.14, with a median of 1.38.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. LFC has a P/S ratio of 0.79. This compares to its industry's average P/S of 0.94.
These figures are just a handful of the metrics value investors tend to look at, but they help show that China Life is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, LFC feels like a great value stock at the moment.