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Are These Finance Stocks Undervalued Right Now?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

First American Financial (FAF) is a stock many investors are watching right now. FAF is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 11.33. This compares to its industry's average Forward P/E of 28.77. Over the past year, FAF's Forward P/E has been as high as 11.96 and as low as 8.57, with a median of 10.70.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. FAF has a P/S ratio of 0.92. This compares to its industry's average P/S of 0.99.

If you're looking for another solid Insurance - Property and Casualty value stock, take a look at Universal Insurance Holdings (UVE). UVE is a # 2 (Buy) stock with a Value score of A.

Furthermore, Universal Insurance Holdings holds a P/B ratio of 1.04 and its industry's price-to-book ratio is 1.28. UVE's P/B has been as high as 1.15, as low as 0.82, with a median of 0.96 over the past 12 months.

These are only a few of the key metrics included in First American Financial and Universal Insurance Holdings strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, FAF and UVE look like an impressive value stock at the moment.


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First American Financial Corporation (FAF) : Free Stock Analysis Report
 
UNIVERSAL INSURANCE HOLDINGS INC (UVE) : Free Stock Analysis Report
 
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