Should Value Investors Buy PT Telekomunikasi Indonesia (TLK) Stock?

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 PT Telekomunikasi Indonesia (TLK). TLK is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 10.54 right now. For comparison, its industry sports an average P/E of 20.75. Over the past year, TLK's Forward P/E has been as high as 11.95 and as low as 7.98, with a median of 9.97.

We should also highlight that TLK has a P/B ratio of 1.54. 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. This stock's P/B looks attractive against its industry's average P/B of 2.39. Over the past year, TLK's P/B has been as high as 2.34 and as low as 1.28, with a median of 1.74.

Value investors will likely look at more than just these metrics, but the above data helps show that PT Telekomunikasi Indonesia is likely undervalued currently. And when considering the strength of its earnings outlook, TLK sticks out as one of the market's strongest value stocks.

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This article originally published on Zacks Investment Research (zacks.com).

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