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Is OneMain Holdings (OMF) Stock Undervalued Right Now?

Zacks Equity Research

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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

One company value investors might notice is OneMain Holdings (OMF). OMF is currently sporting a Zacks Rank of #2 (Buy), as well as 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 8.27. Over the past year, OMF's Forward P/E has been as high as 7.08 and as low as 5.10, with a median of 5.84.

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Investors will also notice that OMF has a PEG ratio of 0.63. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. OMF's industry currently sports an average PEG of 0.72. Within the past year, OMF's PEG has been as high as 0.81 and as low as 0.51, with a median of 0.61.

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


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Zacks Investment Research