Is Axa (AXAHY) Stock Undervalued Right Now?
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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is Axa (AXAHY). AXAHY is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock has a Forward P/E ratio of 8.69. This compares to its industry's average Forward P/E of 9.73. Over the past 52 weeks, AXAHY's Forward P/E has been as high as 9.47 and as low as 6.47, with a median of 7.89.
AXAHY is also sporting a PEG ratio of 1.11. 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. AXAHY's PEG compares to its industry's average PEG of 1.59. Over the last 12 months, AXAHY's PEG has been as high as 1.30 and as low as 0.41, with a median of 1.03.
We should also highlight that AXAHY has a P/B ratio of 1.33. The P/B ratio pits a stock's market value against 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 3.11. AXAHY's P/B has been as high as 1.33 and as low as 0.61, with a median of 0.91, over the past year.
Investors could also keep in mind Prudential Financial (PRU), an Insurance - Multi line stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Shares of Prudential Financial currently holds a Forward P/E ratio of 8.37, and its PEG ratio is 0.99. In comparison, its industry sports average P/E and PEG ratios of 9.73 and 1.59.
Over the past year, PRU's P/E has been as high as 10.48, as low as 7.31, with a median of 8.64; its PEG ratio has been as high as 1.13, as low as 0.81, with a median of 1.03 during the same time period.
Additionally, Prudential Financial has a P/B ratio of 2.23 while its industry's price-to-book ratio sits at 3.11. For PRU, this valuation metric has been as high as 2.39, as low as 0.62, with a median of 1.23 over the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Axa and Prudential Financial are likely undervalued currently. And when considering the strength of its earnings outlook, AXAHY and PRU sticks out as one of the market's strongest value stocks.
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