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Should Value Investors Buy Franklin Resources (BEN) Stock?

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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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

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.

Another valuation metric that we should highlight is BEN's P/B ratio of 1.60. The P/B ratio pits a stock's market value against 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 1.65. BEN's P/B has been as high as 1.79 and as low as 1.43, with a median of 1.64, over the past year.

Finally, we should also recognize that BEN has a P/CF ratio of 9.81. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 12.04. Over the past year, BEN's P/CF has been as high as 22.07 and as low as 8.34, with a median of 16.75.

These are only a few of the key metrics included in Franklin Resources'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, BEN looks like an impressive value stock at the moment.


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