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Is China Life (LFC) Stock Undervalued Right Now?

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  • LFC

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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 China Life (LFC). LFC is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value.

We also note that LFC holds a PEG ratio of 0.23. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. LFC's industry has an average PEG of 0.24 right now. Over the last 12 months, LFC's PEG has been as high as 0.63 and as low as 0.23, with a median of 0.51.

Investors should also recognize that LFC has a P/B ratio of 1.32. Investors use the P/B ratio to look at a stock's market value versus 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 1.80. Over the past 12 months, LFC's P/B has been as high as 1.67 and as low as 1.14, with a median of 1.29.

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. LFC has a P/S ratio of 0.7. This compares to its industry's average P/S of 0.81.

These are only a few of the key metrics included in China Life's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, LFC looks like an impressive value stock at the moment.


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