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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 company to watch right now is Kemper (KMPR). KMPR is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A.
We should also highlight that KMPR has a P/B ratio of 1.35. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. KMPR's current P/B looks attractive when compared to its industry's average P/B of 2.52. Over the past 12 months, KMPR's P/B has been as high as 1.67 and as low as 1.21, with a median of 1.48.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. KMPR has a P/S ratio of 0.83. This compares to its industry's average P/S of 1.05.
Finally, we should also recognize that KMPR has a P/CF ratio of 10.01. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. KMPR's P/CF compares to its industry's average P/CF of 10.14. Over the past year, KMPR's P/CF has been as high as 41.03 and as low as 8.96, with a median of 11.87.
These are only a few of the key metrics included in Kemper's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, KMPR looks like an impressive value stock at the moment.
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Kemper Corporation (KMPR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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