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Is OneMain Holdings (OMF) 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, 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 to watch right now is OneMain Holdings (OMF - Free Report) . OMF is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

We also note that OMF holds a PEG ratio of 0.25. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. OMF's industry currently sports an average PEG of 0.72. OMF's PEG has been as high as 0.78 and as low as 0.21, with a median of 0.59, all within the past year.

Another valuation metric that we should highlight is OMF's P/B ratio of 0.55. The P/B ratio pits a stock's market value against 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 0.90. Over the past year, OMF's P/B has been as high as 1.53 and as low as 0.45, with a median of 1.21.

Finally, we should also recognize that OMF has a P/CF ratio of 2.13. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. OMF's current P/CF looks attractive when compared to its industry's average P/CF of 5.05. Within the past 12 months, OMF's P/CF has been as high as 6.29 and as low as 1.74, with a median of 5.42.

These are just a handful of the figures considered in OneMain Holdings's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that OMF is an impressive value stock right now.


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