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.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One stock to keep an eye on is Intercorp Financial Services (IFS). IFS is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 6.57 right now. For comparison, its industry sports an average P/E of 10.95. Over the last 12 months, IFS's Forward P/E has been as high as 9.34 and as low as 5.33, with a median of 6.36.
Investors should also note that IFS holds a PEG ratio of 0.53. 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. IFS's PEG compares to its industry's average PEG of 0.95. Within the past year, IFS's PEG has been as high as 0.63 and as low as 0.39, with a median of 0.47.
We should also highlight that IFS has a P/B ratio of 1.25. 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. This stock's P/B looks solid versus its industry's average P/B of 3.04. Over the past 12 months, IFS's P/B has been as high as 1.77 and as low as 0.95, with a median of 1.19.
Finally, we should also recognize that IFS has a P/CF ratio of 6.18. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 15.24. Within the past 12 months, IFS's P/CF has been as high as 8.47 and as low as 4.85, with a median of 6.02.
Investors could also keep in mind LendingClub (LC), an Financial - Miscellaneous Services stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.
Additionally, LendingClub has a P/B ratio of 0.82 while its industry's price-to-book ratio sits at 3.04. For LC, this valuation metric has been as high as 2.93, as low as 0.78, with a median of 1.42 over the past year.
These are only a few of the key metrics included in Intercorp Financial Services and LendingClub strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, IFS and LC look like an impressive value stock at the moment.
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