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MARKETS LIVE BLOG:

STOCKS SLIP WITH MIDEAST TENSIONS, EARNINGS IN PLAY

Oil pares losses as traders anticipate Israel's response to Iranian attack

Should Value Investors Buy Navient (NAVI) Stock?

Zacks Equity Research

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.

Navient (NAVI) is a stock many investors are watching right now. NAVI is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 5.65, which compares to its industry's average of 7.56. Over the past year, NAVI's Forward P/E has been as high as 6.98 and as low as 4.19, with a median of 5.90.

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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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. NAVI has a P/S ratio of 0.56. This compares to its industry's average P/S of 1.37.

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


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