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.
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 company value investors might notice is Intercorp Financial Services (IFS). IFS is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 7.60. This compares to its industry's average Forward P/E of 15.68. IFS's Forward P/E has been as high as 10.57 and as low as 5.61, with a median of 6.55, all within the past year.
Another valuation metric that we should highlight is IFS's P/B ratio of 1.33. 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 attractive against its industry's average P/B of 3.18. IFS's P/B has been as high as 1.34 and as low as 0.90, with a median of 1.14, over the past year.
Finally, our model also underscores that IFS has a P/CF ratio of 8.54. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 14.51. Over the past year, IFS's P/CF has been as high as 8.71 and as low as 6.79, with a median of 7.79.
Another great Financial - Miscellaneous Services stock you could consider is Virtu Financial (VIRT), which is a # 2 (Buy) stock with a Value Score of A.
Shares of Virtu Financial currently holds a Forward P/E ratio of 10.18, and its PEG ratio is 1.45. In comparison, its industry sports average P/E and PEG ratios of 15.68 and 0.98.
Over the last 12 months, VIRT's P/E has been as high as 12.61, as low as 8.41, with a median of 10.39, and its PEG ratio has been as high as 1.53, as low as 0.36, with a median of 0.43.
Additionally, Virtu Financial has a P/B ratio of 3.82 while its industry's price-to-book ratio sits at 3.18. For VIRT, this valuation metric has been as high as 4.23, as low as 2.36, with a median of 3.53 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Intercorp Financial Services and Virtu Financial are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, IFS and VIRT feels like a great value stock at the moment.
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Intercorp Financial Services Inc. (IFS): Free Stock Analysis Report Virtu Financial, Inc. (VIRT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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