Yahoo Finance Should Value Investors Buy PennyMac Financial Services (PFSI) Stock?
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 company to watch right now is PennyMac Financial Services (PFSI). PFSI 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 6.66. This compares to its industry's average Forward P/E of 7.68. Over the last 12 months, PFSI's Forward P/E has been as high as 8.25 and as low as 3.47, with a median of 5.16.
Investors should also recognize that PFSI has a P/B ratio of 0.81. 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. PFSI's current P/B looks attractive when compared to its industry's average P/B of 1.31. Within the past 52 weeks, PFSI's P/B has been as high as 1.22 and as low as 0.64, with a median of 0.86.
Finally, our model also underscores that PFSI has a P/CF ratio of 4.14. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 6.16. Over the past 52 weeks, PFSI's P/CF has been as high as 4.48 and as low as 2.72, with a median of 3.41.
Value investors will likely look at more than just these metrics, but the above data helps show that PennyMac Financial Services is likely undervalued currently. And when considering the strength of its earnings outlook, PFSI sticks out at as one of the market's strongest value stocks.
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
PennyMac Financial Services, Inc. (PFSI) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
