Should Value Investors Buy The Travelers Companies (TRV) Stock?
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company to watch right now is The Travelers Companies (TRV). TRV is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 12.07, which compares to its industry's average of 27.40. Over the past 52 weeks, TRV's Forward P/E has been as high as 17.36 and as low as 10.11, with a median of 11.35.
TRV is also sporting a PEG ratio of 1.05. 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. TRV's industry currently sports an average PEG of 2.53. Within the past year, TRV's PEG has been as high as 2.24 and as low as 0.99, with a median of 1.10.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. TRV has a P/S ratio of 1.22. This compares to its industry's average P/S of 1.25.
Finally, we should also recognize that TRV has a P/CF ratio of 5.09. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. TRV's P/CF compares to its industry's average P/CF of 8.20. Within the past 12 months, TRV's P/CF has been as high as 5.17 and as low as 4.08, with a median of 4.45.
These are only a few of the key metrics included in The Travelers Companies's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, TRV looks like an impressive value stock at the moment.
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The Travelers Companies, Inc. (TRV) : Free Stock Analysis Report
