Are Investors Undervaluing These Finance Stocks Right Now?

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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.

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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.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the “Value” category. Stocks with high Zacks Ranks and “A” grades for Value will be some of the highest-quality value stocks on the market today.

One company to watch right now is CNA Financial (CNA). CNA is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 9.86. This compares to its industry’s average Forward P/E of 29.26. CNA’s Forward P/E has been as high as 11.83 and as low as 9.44, with a median of 10.59, all within the past year.

CNA is also sporting a PEG ratio of 1.97. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock’s expected earnings growth rate. CNA’s PEG compares to its industry’s average PEG of 3.36. Over the last 12 months, CNA’s PEG has been as high as 2.37 and as low as 1.89, with a median of 2.12.

Another notable valuation metric for CNA is its P/B ratio of 0.94. 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 attractive against its industry’s average P/B of 1.30. Within the past 52 weeks, CNA’s P/B has been as high as 1.09 and as low as 0.81, with a median of 0.95.

Investors could also keep in mind Stewart Information Services (STC), an Insurance – Property and Casualty stock with a Zacks Rank of # 2 (Buy) and Value grade of A.

Stewart Information Services also has a P/B ratio of 1.73 compared to its industry’s price-to-book ratio of 1.30. Over the past year, its P/B ratio has been as high as 1.76, as low as 1.22, with a median of 1.44.

Value investors will likely look at more than just these metrics, but the above data helps show that CNA Financial and Stewart Information Services are likely undervalued currently. And when considering the strength of its earnings outlook, CNA and STC sticks out as one of the market’s strongest value stocks.

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CNA Financial Corporation (CNA): Free Stock Analysis Report

Stewart Information Services Corporation (STC): Free Stock Analysis Report

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