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Is PennyMac Financial (PFSI) a Great Value Stock Right Now?
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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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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.
One company value investors might notice is PennyMac Financial (PFSI - Free Report) . PFSI is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock has a Forward P/E ratio of 7.27. This compares to its industry's average Forward P/E of 8.81. Over the past 52 weeks, PFSI's Forward P/E has been as high as 8.53 and as low as 6.40, with a median of 7.43.
PFSI is also sporting a PEG ratio of 0.73. 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. PFSI's PEG compares to its industry's average PEG of 1.03. Over the past 52 weeks, PFSI's PEG has been as high as 0.90 and as low as 0.64, with a median of 0.74.
We should also highlight that PFSI has a P/B ratio of 1.06. 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. PFSI's current P/B looks attractive when compared to its industry's average P/B of 2.30. Over the past year, PFSI's P/B has been as high as 1.14 and as low as 0.25, with a median of 0.97.
Finally, we should also recognize that PFSI has a P/CF ratio of 4.32. 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. This stock's P/CF looks attractive against its industry's average P/CF of 15.17. Within the past 12 months, PFSI's P/CF has been as high as 5.70 and as low as 3.87, with a median of 4.52.
These figures are just a handful of the metrics value investors tend to look at, but they help show that PennyMac Financial is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, PFSI feels like a great value stock at the moment.
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Is PennyMac Financial (PFSI) a Great Value Stock Right Now?
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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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.
One company value investors might notice is PennyMac Financial (PFSI - Free Report) . PFSI is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock has a Forward P/E ratio of 7.27. This compares to its industry's average Forward P/E of 8.81. Over the past 52 weeks, PFSI's Forward P/E has been as high as 8.53 and as low as 6.40, with a median of 7.43.
PFSI is also sporting a PEG ratio of 0.73. 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. PFSI's PEG compares to its industry's average PEG of 1.03. Over the past 52 weeks, PFSI's PEG has been as high as 0.90 and as low as 0.64, with a median of 0.74.
We should also highlight that PFSI has a P/B ratio of 1.06. 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. PFSI's current P/B looks attractive when compared to its industry's average P/B of 2.30. Over the past year, PFSI's P/B has been as high as 1.14 and as low as 0.25, with a median of 0.97.
Finally, we should also recognize that PFSI has a P/CF ratio of 4.32. 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. This stock's P/CF looks attractive against its industry's average P/CF of 15.17. Within the past 12 months, PFSI's P/CF has been as high as 5.70 and as low as 3.87, with a median of 4.52.
These figures are just a handful of the metrics value investors tend to look at, but they help show that PennyMac Financial is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, PFSI feels like a great value stock at the moment.