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Should Value Investors Buy Unicom (CHU) Stock?

Zacks Equity Research
Nokia (NOK) closed the most recent trading day at $5.12, moving +0.39% from the previous trading session.

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 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.

Unicom (CHU) is a stock many investors are watching right now. CHU is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

We also note that CHU holds a PEG ratio of 0.28. 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. CHU's industry currently sports an average PEG of 0.68. Over the past 52 weeks, CHU's PEG has been as high as 0.36 and as low as 0.28, with a median of 0.31.

Another valuation metric that we should highlight is CHU's P/B ratio of 0.79. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. CHU's current P/B looks attractive when compared to its industry's average P/B of 0.99. CHU's P/B has been as high as 0.94 and as low as 0.66, with a median of 0.77, over the past year.

These are only a few of the key metrics included in Unicom'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, CHU looks like an impressive value stock at the moment.


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