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Are Investors Undervaluing Hexindai Inc. Sponsored ADR (HX) Right Now?

Zacks Equity Research

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

One company to watch right now is Hexindai Inc. Sponsored ADR (HX). HX is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A.

Another valuation metric that we should highlight is HX's P/B ratio of 0.99. The P/B ratio is used to compare a stock's market value with 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 2. Over the past year, HX's P/B has been as high as 3.51 and as low as 0.71, with a median of 1.49.

Finally, investors should note that HX has a P/CF ratio of 5.83. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 9.26. HX's P/CF has been as high as 9.76 and as low as 1.63, with a median of 6.44, 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 Hexindai Inc. Sponsored ADR is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, HX feels like a great value stock at the moment.


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