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Are Investors Undervaluing Globe Life (GL) Right Now?

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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One stock to keep an eye on is Globe Life (GL). GL is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 5.32, which compares to its industry's average of 12.09. Over the past 52 weeks, GL's Forward P/E has been as high as 11.53 and as low as 4.15, with a median of 10.20.


Investors should also recognize that GL has a P/B ratio of 1.33. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. GL's current P/B looks attractive when compared to its industry's average P/B of 2.04. Over the past 12 months, GL's P/B has been as high as 2.77 and as low as 1.03, with a median of 2.62.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. GL has a P/S ratio of 1.12. This compares to its industry's average P/S of 1.66.

Finally, our model also underscores that GL has a P/CF ratio of 4.47. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 13.38. GL's P/CF has been as high as 9.08 and as low as 3.48, with a median of 7.20, all within the past year.

Value investors will likely look at more than just these metrics, but the above data helps show that Globe Life is likely undervalued currently. And when considering the strength of its earnings outlook, GL sticks out at as one of the market's strongest value stocks.

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