While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
KT (KT) is a stock many investors are watching right now. KT is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock holds a P/E ratio of 7.78, while its industry has an average P/E of 11.05. KT's Forward P/E has been as high as 18.18 and as low as 6.09, with a median of 7.32, all within the past year.
Another valuation metric that we should highlight is KT's P/B ratio of 0.76. 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. KT's current P/B looks attractive when compared to its industry's average P/B of 2.24. Over the past 12 months, KT's P/B has been as high as 0.83 and as low as 0.57, with a median of 0.72.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. KT has a P/S ratio of 0.5. This compares to its industry's average P/S of 1.21.
Finally, our model also underscores that KT has a P/CF ratio of 2.68. 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. This stock's P/CF looks attractive against its industry's average P/CF of 3.47. Over the past year, KT's P/CF has been as high as 3.11 and as low as 1.85, with a median of 2.69.
These are just a handful of the figures considered in KT's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that KT is an impressive value stock right now.
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KT Corporation (KT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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