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, 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 stock to keep an eye on is Axos Financial (AX). AX is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 9.34, while its industry has an average P/E of 18.24. 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 9.12.
Another valuation metric that we should highlight is AX's P/B ratio of 1.53. The P/B is a method of comparing a stock's market value to 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 3.30. Within the past 52 weeks, AX's P/B has been as high as 2.06 and as low as 1.22, with a median of 1.56.
Finally, investors should note that AX has a P/CF ratio of 11.66. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 20.50. Over the past 52 weeks, AX's P/CF has been as high as 12.15 and as low as 6.96, with a median of 10.14.
These are just a handful of the figures considered in Axos Financial'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 AX is an impressive value stock right now.
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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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