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Are Investors Undervaluing PennyMac Financial (PFSI) Right Now?
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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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 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 stock to keep an eye on is PennyMac Financial (PFSI - Free Report) . PFSI is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with P/E ratio of 7.18 right now. For comparison, its industry sports an average P/E of 8.02. PFSI's Forward P/E has been as high as 8.53 and as low as 6.56, with a median of 7.56, all within the past year.
PFSI is also sporting 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 industry currently sports an average PEG of 0.96. 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 0.76.
Another valuation metric that we should highlight is PFSI's P/B ratio of 1.35. 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 2.15. PFSI's P/B has been as high as 1.41 and as low as 0.26, with a median of 1.06, over the past year.
Finally, investors will want to recognize that PFSI has a P/CF ratio of 3.28. 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 11.24. PFSI's P/CF has been as high as 5.30 and as low as 2.96, with a median of 4.01, all within the past year.
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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Are Investors Undervaluing PennyMac Financial (PFSI) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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 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 stock to keep an eye on is PennyMac Financial (PFSI - Free Report) . PFSI is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with P/E ratio of 7.18 right now. For comparison, its industry sports an average P/E of 8.02. PFSI's Forward P/E has been as high as 8.53 and as low as 6.56, with a median of 7.56, all within the past year.
PFSI is also sporting 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 industry currently sports an average PEG of 0.96. 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 0.76.
Another valuation metric that we should highlight is PFSI's P/B ratio of 1.35. 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 2.15. PFSI's P/B has been as high as 1.41 and as low as 0.26, with a median of 1.06, over the past year.
Finally, investors will want to recognize that PFSI has a P/CF ratio of 3.28. 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 11.24. PFSI's P/CF has been as high as 5.30 and as low as 2.96, with a median of 4.01, all within the past year.
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.