Back to top

Image: Bigstock

Are Investors Undervaluing JMP (JMP) Right Now?

Read MoreHide Full Article

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

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

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.

JMP (JMP) is a stock many investors are watching right now. JMP is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 6.33, which compares to its industry's average of 12.25. Over the past 52 weeks, JMP's Forward P/E has been as high as 13.34 and as low as -166.81, with a median of 10.48.

We also note that JMP holds a PEG ratio of 0.63. 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. JMP's PEG compares to its industry's average PEG of 1.44. Over the past 52 weeks, JMP's PEG has been as high as 1.33 and as low as -16.68, with a median of 1.05.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. JMP has a P/S ratio of 0.47. This compares to its industry's average P/S of 1.07.

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

Published in