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Is China Mobile (CHL) Stock Undervalued Right Now?

Zacks Equity Research
·2-min read

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 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 company value investors might notice is China Mobile (CHL). CHL is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 9.03 right now. For comparison, its industry sports an average P/E of 12.05. CHL's Forward P/E has been as high as 11.45 and as low as 7.83, with a median of 10.35, all within the past year.

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Another valuation metric that we should highlight is CHL's P/B ratio of 0.86. 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 solid versus its industry's average P/B of 2.23. Over the past 12 months, CHL's P/B has been as high as 1.18 and as low as 0.80, with a median of 1.05.

These are only a few of the key metrics included in China Mobile's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, CHL looks like an impressive value stock at the moment.


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