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Are Investors Undervaluing Huntington Bancshares (HBAN) Right Now?

Zacks Equity Research
MGIC (MTG) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

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.

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 Huntington Bancshares (HBAN). HBAN is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 11.30. This compares to its industry's average Forward P/E of 13. Over the past 52 weeks, HBAN's Forward P/E has been as high as 16.68 and as low as 11.29, with a median of 12.28.

HBAN is also sporting a PEG ratio of 0.77. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. HBAN's PEG compares to its industry's average PEG of 1.15. Within the past year, HBAN's PEG has been as high as 1.85 and as low as 0.77, with a median of 1.12.

Another notable valuation metric for HBAN is its P/B ratio of 1.65. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. HBAN's current P/B looks attractive when compared to its industry's average P/B of 2.63. Over the past year, HBAN's P/B has been as high as 1.82 and as low as 1.48, with a median of 1.65.

Finally, investors will want to recognize that HBAN has a P/CF ratio of 9.46. 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. HBAN's P/CF compares to its industry's average P/CF of 16.03. Over the past 52 weeks, HBAN's P/CF has been as high as 12.60 and as low as 9.05, with a median of 10.72.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Huntington Bancshares is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, HBAN feels like a great value stock at the moment.


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