We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Are Investors Undervaluing PennyMac Financial (PFSI) Right Now?
Read MoreHide Full Article
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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 PennyMac Financial (PFSI - Free Report) . PFSI is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock holds a P/E ratio of 7.22, while its industry has an average P/E of 7.72. Over the past 52 weeks, PFSI's Forward P/E has been as high as 8.53 and as low as 6.56, with a median of 7.48.
Investors should also note that PFSI holds a PEG ratio of 0.72. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. PFSI's PEG compares to its industry's average PEG of 0.93. Over the past 52 weeks, PFSI's PEG has been as high as 0.85 and as low as 0.66, with a median of 0.75.
Another valuation metric that we should highlight is PFSI's P/B ratio of 1.17. 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 solid versus its industry's average P/B of 1.89. Over the past year, PFSI's P/B has been as high as 1.18 and as low as 0.25, with a median of 0.99.
Finally, we should also recognize that PFSI has a P/CF ratio of 3.52. 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 stock's P/CF looks attractive against its industry's average P/CF of 12.10. Over the past 52 weeks, PFSI's P/CF has been as high as 5.70 and as low as 3.01, with a median of 4.31.
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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Are Investors Undervaluing PennyMac Financial (PFSI) 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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 PennyMac Financial (PFSI - Free Report) . PFSI is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock holds a P/E ratio of 7.22, while its industry has an average P/E of 7.72. Over the past 52 weeks, PFSI's Forward P/E has been as high as 8.53 and as low as 6.56, with a median of 7.48.
Investors should also note that PFSI holds a PEG ratio of 0.72. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. PFSI's PEG compares to its industry's average PEG of 0.93. Over the past 52 weeks, PFSI's PEG has been as high as 0.85 and as low as 0.66, with a median of 0.75.
Another valuation metric that we should highlight is PFSI's P/B ratio of 1.17. 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 solid versus its industry's average P/B of 1.89. Over the past year, PFSI's P/B has been as high as 1.18 and as low as 0.25, with a median of 0.99.
Finally, we should also recognize that PFSI has a P/CF ratio of 3.52. 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 stock's P/CF looks attractive against its industry's average P/CF of 12.10. Over the past 52 weeks, PFSI's P/CF has been as high as 5.70 and as low as 3.01, with a median of 4.31.
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.