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.
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.
Radian (RDN - Free Report) is a stock many investors are watching right now. RDN is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 7.78, which compares to its industry's average of 8.91. RDN's Forward P/E has been as high as 8.48 and as low as 5.42, with a median of 7.20, all within the past year.
We should also highlight that RDN has a P/B ratio of 1.30. 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 company's current P/B looks solid when compared to its industry's average P/B of 1.43. Over the past 12 months, RDN's P/B has been as high as 1.39 and as low as 0.95, with a median of 1.23.
Finally, investors should note that RDN has a P/CF ratio of 6.75. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. RDN's current P/CF looks attractive when compared to its industry's average P/CF of 6.77. RDN's P/CF has been as high as 8.81 and as low as 4.35, with a median of 6.47, all within the past year.
These are only a few of the key metrics included in Radian's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, RDN looks like an impressive value stock at the moment.