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Should Value Investors Choose Horace Mann (HMN) Stock Now?
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Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Horace Mann Educators Corporation (HMN - Free Report) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Horace Mann Educators has a trailing twelve months PE ratio of 15.61, as you can see in the chart below:
This level actually compares favorably with the market at large, as the PE for the S&P 500 stands at about 20.54. If we focus on the long-term PE trend, Horace Mann Educators’ current PE level puts it below its midpoint over the past five years. Moreover, the current level is fairly below the highs for this stock, suggesting it might be a good entry point.
Moreover, the stock’s PE also compares unfavorably with the Zacks Finance sector’s trailing twelve months PE ratio, which stands at 13.05. At the very least, this indicates that the stock is slightly overvalued right now, compared to its peers.
We should also point out that Horace Mann Educators has a forward PE ratio (price relative to this year’s earnings) of just 13.28, so it is fair to say that a slightly more value-oriented path may be ahead for Horace Mann Educators’ stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Horace Mann Educators has a P/S ratio of about 1.06. This is relatively lower than the S&P 500 average, which comes in at 3.44 right now. Also, as we can see in the chart below, this is well below the highs for this stock in particular over the past few years.
If anything, HMN is in the lower end of its range in the time period from a P/S metric, suggesting some level of undervalued trading—at least compared to historical norms.
Broad Value Outlook
In aggregate, Horace Mann Educators currently has a Zacks Value Style Score of A, putting it into the top 20% of all stocks we cover from this look. This makes Horace Mann Educators a solid choice for value investors.
What about the Stock Overall?
Though Horace Mann Educators might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of C and a Momentum score of D. This gives HMN a Zacks VGM score—or its overarching fundamental grade—of B. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been mixed, at the best. The current quarter consensus estimate remained unchanged in the past two months, whereas the current year estimates also remained unchanged in the past two months. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Horace Mann Educators Corporation Price and Consensus
Even with mixed estimate trend, the stock has a Zacks Rank #2 (Buy), on the back of its strong value metrics and this is why we are expecting outperformance from the company in the near-term.
Bottom Line
Horace Mann Educators is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Furthermore, a robust industry rank (among the Top 24%) and a solid Zacks Rank instills investor confidence.
So, value investors might want to delve deeper in this stock as it appears to be a compelling pick.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
This young company’s gigantic growth was hidden by low-volume trading, then cut short by the coronavirus. But its digital products stand out in a region where the internet economy has tripled since 2015 and looks to triple again by 2025.
Its stock price is already starting to resume its upward arc. The sky’s the limit! And the earlier you get in, the greater your potential gain.
Image: Bigstock
Should Value Investors Choose Horace Mann (HMN) Stock Now?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Horace Mann Educators Corporation (HMN - Free Report) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Horace Mann Educators has a trailing twelve months PE ratio of 15.61, as you can see in the chart below:
This level actually compares favorably with the market at large, as the PE for the S&P 500 stands at about 20.54. If we focus on the long-term PE trend, Horace Mann Educators’ current PE level puts it below its midpoint over the past five years. Moreover, the current level is fairly below the highs for this stock, suggesting it might be a good entry point.
Moreover, the stock’s PE also compares unfavorably with the Zacks Finance sector’s trailing twelve months PE ratio, which stands at 13.05. At the very least, this indicates that the stock is slightly overvalued right now, compared to its peers.
We should also point out that Horace Mann Educators has a forward PE ratio (price relative to this year’s earnings) of just 13.28, so it is fair to say that a slightly more value-oriented path may be ahead for Horace Mann Educators’ stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Horace Mann Educators has a P/S ratio of about 1.06. This is relatively lower than the S&P 500 average, which comes in at 3.44 right now. Also, as we can see in the chart below, this is well below the highs for this stock in particular over the past few years.
If anything, HMN is in the lower end of its range in the time period from a P/S metric, suggesting some level of undervalued trading—at least compared to historical norms.
Broad Value Outlook
In aggregate, Horace Mann Educators currently has a Zacks Value Style Score of A, putting it into the top 20% of all stocks we cover from this look. This makes Horace Mann Educators a solid choice for value investors.
What about the Stock Overall?
Though Horace Mann Educators might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of C and a Momentum score of D. This gives HMN a Zacks VGM score—or its overarching fundamental grade—of B. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been mixed, at the best. The current quarter consensus estimate remained unchanged in the past two months, whereas the current year estimates also remained unchanged in the past two months. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Horace Mann Educators Corporation Price and Consensus
Horace Mann Educators Corporation price-consensus-chart | Horace Mann Educators Corporation Quote
Even with mixed estimate trend, the stock has a Zacks Rank #2 (Buy), on the back of its strong value metrics and this is why we are expecting outperformance from the company in the near-term.
Bottom Line
Horace Mann Educators is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Furthermore, a robust industry rank (among the Top 24%) and a solid Zacks Rank instills investor confidence.
So, value investors might want to delve deeper in this stock as it appears to be a compelling pick.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
This young company’s gigantic growth was hidden by low-volume trading, then cut short by the coronavirus. But its digital products stand out in a region where the internet economy has tripled since 2015 and looks to triple again by 2025.
Its stock price is already starting to resume its upward arc. The sky’s the limit! And the earlier you get in, the greater your potential gain.
Click Here, See It Free >>