Investors interested in stocks from the Financial - Investment Bank sector have probably already heard of JMP (JMP) and Ladenburg Thalmann (LTS). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, JMP has a Zacks Rank of #2 (Buy), while Ladenburg Thalmann has a Zacks Rank of #5 (Strong Sell). This means that JMP's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
JMP currently has a forward P/E ratio of 11.82, while LTS has a forward P/E of 63. We also note that JMP has a PEG ratio of 1.18. 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. LTS currently has a PEG ratio of 4.20.
Another notable valuation metric for JMP is its P/B ratio of 0.96. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, LTS has a P/B of 1.84.
Based on these metrics and many more, JMP holds a Value grade of B, while LTS has a Value grade of D.
JMP sticks out from LTS in both our Zacks Rank and Style Scores models, so value investors will likely feel that JMP is the better option right now.
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JMP Group LLC (JMP) : Free Stock Analysis Report
Ladenburg Thalmann Financial Services Inc (LTS) : Free Stock Analysis Report
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