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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.
Axos Financial (AX) is a stock many investors are watching right now. AX is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 8.53 right now. For comparison, its industry sports an average P/E of 15.59. Over the past year, AX's Forward P/E has been as high as 12.11 and as low as 6.93, with a median of 8.95.
Another notable valuation metric for AX is its P/B ratio of 1.44. 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. AX's current P/B looks attractive when compared to its industry's average P/B of 3.16. Over the past 12 months, AX's P/B has been as high as 2.06 and as low as 1.28, with a median of 1.57.
Finally, investors will want to recognize that AX has a P/CF ratio of 10.36. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. AX's current P/CF looks attractive when compared to its industry's average P/CF of 14.41. Within the past 12 months, AX's P/CF has been as high as 12.11 and as low as 6.96, with a median of 9.65.
Value investors will likely look at more than just these metrics, but the above data helps show that Axos Financial is likely undervalued currently. And when considering the strength of its earnings outlook, AX sticks out at as one of the market's strongest value stocks.
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AXOS FINANCIAL, INC (AX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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