Is CNFinance (CNF) Stock Undervalued Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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 value investors might notice is CNFinance (CNF). CNF is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 4.51, which compares to its industry's average of 8.68. Over the last 12 months, CNF's Forward P/E has been as high as 24.10 and as low as 4.31, with a median of 6.50.
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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CNF has a P/S ratio of 0.78. This compares to its industry's average P/S of 0.98.
Value investors will likely look at more than just these metrics, but the above data helps show that CNFinance is likely undervalued currently. And when considering the strength of its earnings outlook, CNF sticks out at as one of the market's strongest value stocks.
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