Yahoo Finance Should Value Investors Buy Radian Group (RDN) Stock?
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.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company value investors might notice is Radian Group (RDN). RDN is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 7.81 right now. For comparison, its industry sports an average P/E of 8.55. Over the past year, RDN's Forward P/E has been as high as 8.02 and as low as 4.04, with a median of 6.36.
Another valuation metric that we should highlight is RDN's P/B ratio of 0.97. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. RDN's current P/B looks attractive when compared to its industry's average P/B of 2.17. Over the past year, RDN's P/B has been as high as 1.03 and as low as 0.75, with a median of 0.88.
Finally, our model also underscores that RDN has a P/CF ratio of 5.16. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. RDN's current P/CF looks attractive when compared to its industry's average P/CF of 9.18. RDN's P/CF has been as high as 5.34 and as low as 3.53, with a median of 4.43, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Radian Group is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, RDN feels like a great value stock at the moment.
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Radian Group Inc. (RDN) : Free Stock Analysis Report
