Should Value Investors Buy SK Telecom Co. (SKM) Stock?

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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 SK Telecom Co. (SKM). SKM is currently sporting a Zacks Rank #1 (Strong Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 11.1 right now. For comparison, its industry sports an average P/E of 12.16. Over the past 52 weeks, SKM's Forward P/E has been as high as 11.82 and as low as 8.35, with a median of 9.75.

Another notable valuation metric for SKM is its P/B ratio of 1.03. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. SKM's current P/B looks attractive when compared to its industry's average P/B of 1.29. SKM's P/B has been as high as 1.12 and as low as 0.94, with a median of 1.02, over the past year.

Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. SKM has a P/S ratio of 0.94. This compares to its industry's average P/S of 1.57.

These are only a few of the key metrics included in SK Telecom Co.'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, SKM looks like an impressive value stock at the moment.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research