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Are Investors Undervaluing Essent Group (ESNT) Right Now?

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

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company value investors might notice is Essent Group (ESNT - Free Report) . ESNT is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

We also note that ESNT holds a PEG ratio of 0.86. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ESNT's PEG compares to its industry's average PEG of 1. Within the past year, ESNT's PEG has been as high as 0.93 and as low as 0.61, with a median of 0.81.

Finally, we should also recognize that ESNT has a P/CF ratio of 9.25. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 14.26. Within the past 12 months, ESNT's P/CF has been as high as 9.52 and as low as 5.90, with a median of 8.04.

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


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