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Are Investors Undervaluing Genworth Financial (GNW) 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.

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

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 Genworth Financial (GNW - Free Report) . GNW is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock holds a P/E ratio of 4.41, while its industry has an average P/E of 8.05. GNW's Forward P/E has been as high as 4.92 and as low as 2.98, with a median of 4.05, all within the past year.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. GNW has a P/S ratio of 0.26. This compares to its industry's average P/S of 0.75.

Finally, investors will want to recognize that GNW has a P/CF ratio of 5.50. 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. GNW's P/CF compares to its industry's average P/CF of 15.27. Over the past year, GNW's P/CF has been as high as 6.47 and as low as 1.67, with a median of 4.53.

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


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