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Is Mr Cooper (COOP) a Great Value Stock Right Now?

Zacks Equity Research
·3 min read

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.

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.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company value investors might notice is Mr Cooper (COOP). COOP is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A.

Another notable valuation metric for COOP is its P/B ratio of 0.35. 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 attractive against its industry's average P/B of 0.90. Over the past 12 months, COOP's P/B has been as high as 0.69 and as low as 0.22, with a median of 0.50.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. COOP has a P/S ratio of 0.38. This compares to its industry's average P/S of 0.71.

Finally, our model also underscores that COOP has a P/CF ratio of 2.38. 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. COOP's P/CF compares to its industry's average P/CF of 5.05. Over the past year, COOP's P/CF has been as high as 4.02 and as low as -4.66, with a median of 1.07.

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


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Zacks Investment Research