Yahoo Finance Should Value Investors Buy Western Union (WU) Stock?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 Western Union (WU). WU is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value.
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. WU has a P/S ratio of 1. This compares to its industry's average P/S of 2.7.
Finally, our model also underscores that WU has a P/CF ratio of 5.59. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 18.17. WU's P/CF has been as high as 6.28 and as low as 4.41, with a median of 5.12, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Western Union is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, WU feels like a great value stock at the moment.
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The Western Union Company (WU) : Free Stock Analysis Report
