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.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One stock to keep an eye on is Shinhan Financial Group Co (SHG). SHG is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 6.31 right now. For comparison, its industry sports an average P/E of 11.55. SHG's Forward P/E has been as high as 7.09 and as low as 4.11, with a median of 5.60, all within the past year.
SHG is also sporting a PEG ratio of 0.51. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. SHG's PEG compares to its industry's average PEG of 0.71. Within the past year, SHG's PEG has been as high as 0.72 and as low as 0.37, with a median of 0.51.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. SHG has a P/S ratio of 1.5. This compares to its industry's average P/S of 2.22.
These are just a handful of the figures considered in Shinhan Financial Group Co'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 SHG is an impressive value stock right now.
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Shinhan Financial Group Co Ltd (SHG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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