Are Investors Undervaluing Intercorp Financial Services (IFS) Right Now?
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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 stock to keep an eye on is Intercorp Financial Services (IFS). IFS is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 6.06 right now. For comparison, its industry sports an average P/E of 12.05. Over the past year, IFS's Forward P/E has been as high as 9.34 and as low as 5.33, with a median of 6.30.
Investors will also notice that IFS has a PEG ratio of 0.53. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. IFS's PEG compares to its industry's average PEG of 1.14. Over the last 12 months, IFS's PEG has been as high as 0.63 and as low as 0.39, with a median of 0.47.
Another notable valuation metric for IFS is its P/B ratio of 1.17. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 3.33. Over the past 12 months, IFS's P/B has been as high as 1.77 and as low as 0.95, with a median of 1.19.
Finally, investors should note that IFS has a P/CF ratio of 5.76. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. IFS's current P/CF looks attractive when compared to its industry's average P/CF of 17.01. IFS's P/CF has been as high as 8.47 and as low as 4.85, with a median of 5.99, all within the past year.
Another great Financial - Miscellaneous Services stock you could consider is Orix Corp Ads (IX), which is a # 1 (Strong Buy) stock with a Value Score of A.
Orix Corp Ads is currently trading with a Forward P/E ratio of 8.67 while its PEG ratio sits at 0.43. Both of the company's metrics compare favorably to its industry's average P/E of 12.05 and average PEG ratio of 1.14.
Over the past year, IX's P/E has been as high as 9.62, as low as 6.35, with a median of 7.51; its PEG ratio has been as high as 0.43, as low as 0.28, with a median of 0.47 during the same time period.
Orix Corp Ads also has a P/B ratio of 0.85 compared to its industry's price-to-book ratio of 3.33. Over the past year, its P/B ratio has been as high as 0.90, as low as 0.66, with a median of 0.76.
Value investors will likely look at more than just these metrics, but the above data helps show that Intercorp Financial Services and Orix Corp Ads are likely undervalued currently. And when considering the strength of its earnings outlook, IFS and IX sticks out as one of the market's strongest value stocks.
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