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Should Value Investors Buy Franklin Resources (BEN) Stock?

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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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

Franklin Resources (BEN - Free Report) is a stock many investors are watching right now. BEN is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value.

Investors should also recognize that BEN has a P/B ratio of 1.73. 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 attractive against its industry's average P/B of 1.81. Over the past year, BEN's P/B has been as high as 1.80 and as low as 1.43, with a median of 1.66.

Finally, our model also underscores that BEN has a P/CF ratio of 10.15. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 12.81. Within the past 12 months, BEN's P/CF has been as high as 22.09 and as low as 8.34, with a median of 17.84.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Franklin Resources is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BEN feels like a great value stock at the moment.


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