Are These Finance Stocks Undervalued Right Now?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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.

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 Franklin Resources (BEN). BEN is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 9.36. This compares to its industry's average Forward P/E of 13.01. BEN's Forward P/E has been as high as 11.32 and as low as 8.27, with a median of 9.39, all within the past year.

We should also highlight that BEN has a P/B ratio of 1.46. 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 2.76. Over the past 12 months, BEN's P/B has been as high as 1.60 and as low as 1.13, with a median of 1.38.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. BEN has a P/S ratio of 2.02. This compares to its industry's average P/S of 3.02.

Finally, we should also recognize that BEN has a P/CF ratio of 7.56. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. BEN's P/CF compares to its industry's average P/CF of 13.81. BEN's P/CF has been as high as 14.11 and as low as 6.37, with a median of 9.73, all within the past year.

Another great Financial - Investment Management stock you could consider is Victory Capital Holdings (VCTR), which is a # 2 (Buy) stock with a Value Score of A.

Victory Capital Holdings is currently trading with a Forward P/E ratio of 6.05 while its PEG ratio sits at 0.74. Both of the company's metrics compare favorably to its industry's average P/E of 13.01 and average PEG ratio of 0.71.

Over the past year, VCTR's P/E has been as high as 8.63, as low as 4.94, with a median of 6.55; its PEG ratio has been as high as 0.74, as low as 0.64, with a median of 0.75 during the same time period.

Furthermore, Victory Capital Holdings holds a P/B ratio of 2.57 and its industry's price-to-book ratio is 2.76. VCTR's P/B has been as high as 3.33, as low as 2.03, with a median of 2.68 over the past 12 months.

These are just a handful of the figures considered in Franklin Resources and Victory Capital Holdings'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 BEN and VCTR is an impressive value stock right now.

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