The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
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.
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.
One stock to keep an eye on is United Fire Group (UFCS). UFCS is currently sporting a Zacks Rank #1 (Strong Buy) and an A for Value. The stock has a Forward P/E ratio of 10.16. This compares to its industry's average Forward P/E of 27.48. Over the past year, UFCS's Forward P/E has been as high as 20.43 and as low as 9.98, with a median of 11.30.
We should also highlight that UFCS has a P/B ratio of 0.94. 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. This stock's P/B looks solid versus its industry's average P/B of 1.54. Within the past 52 weeks, UFCS's P/B has been as high as 1.02 and as low as 0.62, with a median of 0.87.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. UFCS has a P/S ratio of 0.6. This compares to its industry's average P/S of 1.3.
Finally, we should also recognize that UFCS has a P/CF ratio of 7.83. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 12.78. Within the past 12 months, UFCS's P/CF has been as high as 13.42 and as low as 6.53, with a median of 9.51.
These are just a handful of the figures considered in United Fire Group'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 UFCS is an impressive value stock right now.
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United Fire Group, Inc (UFCS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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