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Should Value Investors Buy UBS (UBS) Stock?

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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.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

UBS (UBS - Free Report) is a stock many investors are watching right now. UBS is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 10.02, while its industry has an average P/E of 10.44. Over the past 52 weeks, UBS's Forward P/E has been as high as 11.18 and as low as 6.23, with a median of 9.30.

Investors should also note that UBS holds a PEG ratio of 1.04. 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. UBS's industry currently sports an average PEG of 1.52. Over the past 52 weeks, UBS's PEG has been as high as 9.61 and as low as 0.89, with a median of 2.05.

We should also highlight that UBS has a P/B ratio of 0.69. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. UBS's current P/B looks attractive when compared to its industry's average P/B of 1.38. UBS's P/B has been as high as 0.90 and as low as 0.51, with a median of 0.76, over the past year.

Finally, our model also underscores that UBS has a P/CF ratio of 6.14. 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 stock's P/CF looks attractive against its industry's average P/CF of 14.74. Within the past 12 months, UBS's P/CF has been as high as 8.15 and as low as 4.65, with a median of 6.31.

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


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