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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is The Hanover Insurance Group (THG). THG is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 10.86. This compares to its industry's average Forward P/E of 26.78. Over the past 52 weeks, THG's Forward P/E has been as high as 13.52 and as low as 10.12, with a median of 11.25.
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 preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. THG has a P/S ratio of 0.93. This compares to its industry's average P/S of 1.29.
Finally, investors will want to recognize that THG has a P/CF ratio of 11.21. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 12.32. THG's P/CF has been as high as 19.14 and as low as 10.39, with a median of 13.62, all within the past year.
These are just a handful of the figures considered in The Hanover Insurance 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 THG is an impressive value stock right now.
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The Hanover Insurance Group, Inc. (THG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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