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Should Value Investors Buy Deutsche Bank (DB) Stock?

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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.

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 Deutsche Bank (DB - Free Report) . DB is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 5.29, while its industry has an average P/E of 7.19. DB's Forward P/E has been as high as 7.21 and as low as 4.29, with a median of 5.41, all within the past year.

DB is also sporting a PEG ratio of 0.67. 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. DB's PEG compares to its industry's average PEG of 0.73. Over the past 52 weeks, DB's PEG has been as high as 1.01 and as low as 0.48, with a median of 0.68.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. DB has a P/S ratio of 0.49. This compares to its industry's average P/S of 1.3.

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


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