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Is Barclays (BCS) a Great Value Stock Right Now?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 Barclays (BCS - Free Report) . BCS is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 7.49, while its industry has an average P/E of 9.71. Over the past 52 weeks, BCS's Forward P/E has been as high as 13.43 and as low as 7.08, with a median of 9.05.

Another valuation metric that we should highlight is BCS's P/B ratio of 0.46. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.31. Over the past 12 months, BCS's P/B has been as high as 0.62 and as low as 0.43, with a median of 0.52.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. BCS has a P/S ratio of 1.31. This compares to its industry's average P/S of 1.76.

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


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