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Is Yirendai (YRD) 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.

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 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.

Yirendai (YRD - Free Report) is a stock many investors are watching right now. YRD is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value.

We should also highlight that YRD has a P/B ratio of 1.66. 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 4.55. Over the past year, YRD's P/B has been as high as 2.74 and as low as 0.84, with a median of 1.52.

Finally, investors should note that YRD has a P/CF ratio of 6.14. 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 17.27. Within the past 12 months, YRD's P/CF has been as high as 10.12 and as low as 3.66, with a median of 5.95.

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


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