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Is Hilltop Holdings (HTH) Stock Undervalued 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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 Hilltop Holdings (HTH - Free Report) . HTH is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 12, which compares to its industry's average of 13.02. Over the past 52 weeks, HTH's Forward P/E has been as high as 13.70 and as low as 9.98, with a median of 12.26.

Another notable valuation metric for HTH is its P/B ratio of 1.05. 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. HTH's current P/B looks attractive when compared to its industry's average P/B of 1.65. Within the past 52 weeks, HTH's P/B has been as high as 1.15 and as low as 0.82, with a median of 1.01.

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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. HTH has a P/S ratio of 1.23. This compares to its industry's average P/S of 2.74.

Finally, investors will want to recognize that HTH has a P/CF ratio of 11.19. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 13.42. Over the past 52 weeks, HTH's P/CF has been as high as 15.75 and as low as 10.85, with a median of 13.67.

Value investors will likely look at more than just these metrics, but the above data helps show that Hilltop Holdings is likely undervalued currently. And when considering the strength of its earnings outlook, HTH sticks out at as one of the market's strongest value stocks.


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