- Oops!Something went wrong.Please try again later.
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, 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.
First American Financial (FAF) is a stock many investors are watching right now. FAF is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 11.48, which compares to its industry's average of 29.80. FAF's Forward P/E has been as high as 12.45 and as low as 8.57, with a median of 10.78, all within the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. FAF has a P/S ratio of 0.9. This compares to its industry's average P/S of 1.03.
If you're looking for another solid Insurance - Property and Casualty value stock, take a look at The Hanover Insurance Group (THG). THG is a # 2 (Buy) stock with a Value score of A.
Shares of The Hanover Insurance Group currently holds a Forward P/E ratio of 12.77, and its PEG ratio is 1.69. In comparison, its industry sports average P/E and PEG ratios of 29.80 and 3.48.
Over the last 12 months, THG's P/E has been as high as 17.22, as low as 11.90, with a median of 13.73, and its PEG ratio has been as high as 2.80, as low as 1.57, with a median of 2.38.
The Hanover Insurance Group sports a P/B ratio of 1.54 as well; this compares to its industry's price-to-book ratio of 1.34. In the past 52 weeks, THG's P/B has been as high as 1.68, as low as 1.31, with a median of 1.53.
These are only a few of the key metrics included in First American Financial and The Hanover Insurance Group strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, FAF and THG look like an impressive value stock at the moment.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
First American Financial Corporation (FAF) : Free Stock Analysis Report
The Hanover Insurance Group, Inc. (THG) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research