Is Cowen Group (COWN) 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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
Cowen Group (COWN) is a stock many investors are watching right now. COWN is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 5.52 right now. For comparison, its industry sports an average P/E of 11.70. Over the last 12 months, COWN's Forward P/E has been as high as 5.94 and as low as 1.88, with a median of 4.29.
Another notable valuation metric for COWN is its P/B ratio of 0.60. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. COWN's current P/B looks attractive when compared to its industry's average P/B of 1.74. Over the past year, COWN's P/B has been as high as 0.62 and as low as 0.21, with a median of 0.44.
Finally, our model also underscores that COWN has a P/CF ratio of 5.10. 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 stock's P/CF looks attractive against its industry's average P/CF of 14.85. Over the past year, COWN's P/CF has been as high as 12.72 and as low as 3.09, with a median of 5.20.
Value investors will likely look at more than just these metrics, but the above data helps show that Cowen Group is likely undervalued currently. And when considering the strength of its earnings outlook, COWN sticks out at as one of the market's strongest value stocks.
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