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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is Popular (BPOP). BPOP is currently sporting a Zacks Rank #2 (Buy) and an A for Value.
BPOP is also sporting a PEG ratio of 0.61. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. BPOP's industry currently sports an average PEG of 0.90. Within the past year, BPOP's PEG has been as high as 0.92 and as low as 0.50, with a median of 0.60.
We should also highlight that BPOP has a P/B ratio of 1.48. 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 solid versus its industry's average P/B of 1.79. Over the past 12 months, BPOP's P/B has been as high as 1.48 and as low as 0.98, with a median of 1.25.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. BPOP has a P/S ratio of 2.15. This compares to its industry's average P/S of 2.28.
Finally, investors will want to recognize that BPOP has a P/CF ratio of 16.96. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. BPOP's P/CF compares to its industry's average P/CF of 17.46. Over the past 52 weeks, BPOP's P/CF has been as high as 19.54 and as low as 11.90, with a median of 16.06.
These are just a handful of the figures considered in Popular'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 BPOP is an impressive value stock right now.
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Popular, Inc. (BPOP): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).