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, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.
One company to watch right now 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 has a Forward P/E ratio of 6.18. This compares to its industry's average Forward P/E of 9.26. Over the past year, SHG's Forward P/E has been as high as 6.79 and as low as 4.11, with a median of 5.34.
Investors will also notice that SHG has a PEG ratio of 0.53. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. SHG's industry currently sports an average PEG of 0.74. Within the past year, SHG's PEG has been as high as 0.74 and as low as 0.37, with a median of 0.52.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. SHG has a P/S ratio of 0.87. This compares to its industry's average P/S of 1.54.
Finally, our model also underscores that SHG has a P/CF ratio of 5.70. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 15.98. Over the past 52 weeks, SHG's P/CF has been as high as 5.70 and as low as 3.34, with a median of 4.25.
Value investors will likely look at more than just these metrics, but the above data helps show that Shinhan Financial Group Co is likely undervalued currently. And when considering the strength of its earnings outlook, SHG sticks out as one of the market's strongest value stocks.
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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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