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Should Value Investors Buy PennyMac Financial (PFSI) Stock?
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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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is PennyMac Financial (PFSI - Free Report) . PFSI is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 7.32 right now. For comparison, its industry sports an average P/E of 8.08. Over the past 52 weeks, PFSI's Forward P/E has been as high as 8.53 and as low as 6.56, with a median of 7.57.
PFSI is also sporting a PEG ratio of 0.73. 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. PFSI's industry currently sports an average PEG of 0.95. Over the last 12 months, PFSI's PEG has been as high as 0.85 and as low as 0.66, with a median of 0.76.
Another notable valuation metric for PFSI is its P/B ratio of 1.38. The P/B ratio pits a stock's market value against 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 2.17. Over the past 12 months, PFSI's P/B has been as high as 1.41 and as low as 0.26, with a median of 1.05.
Finally, we should also recognize that PFSI has a P/CF ratio of 3.34. 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. PFSI's P/CF compares to its industry's average P/CF of 11.39. Over the past year, PFSI's P/CF has been as high as 5.70 and as low as 2.96, with a median of 4.04.
Value investors will likely look at more than just these metrics, but the above data helps show that PennyMac Financial is likely undervalued currently. And when considering the strength of its earnings outlook, PFSI sticks out at as one of the market's strongest value stocks.
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Should Value Investors Buy PennyMac Financial (PFSI) 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.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is PennyMac Financial (PFSI - Free Report) . PFSI is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 7.32 right now. For comparison, its industry sports an average P/E of 8.08. Over the past 52 weeks, PFSI's Forward P/E has been as high as 8.53 and as low as 6.56, with a median of 7.57.
PFSI is also sporting a PEG ratio of 0.73. 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. PFSI's industry currently sports an average PEG of 0.95. Over the last 12 months, PFSI's PEG has been as high as 0.85 and as low as 0.66, with a median of 0.76.
Another notable valuation metric for PFSI is its P/B ratio of 1.38. The P/B ratio pits a stock's market value against 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 2.17. Over the past 12 months, PFSI's P/B has been as high as 1.41 and as low as 0.26, with a median of 1.05.
Finally, we should also recognize that PFSI has a P/CF ratio of 3.34. 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. PFSI's P/CF compares to its industry's average P/CF of 11.39. Over the past year, PFSI's P/CF has been as high as 5.70 and as low as 2.96, with a median of 4.04.
Value investors will likely look at more than just these metrics, but the above data helps show that PennyMac Financial is likely undervalued currently. And when considering the strength of its earnings outlook, PFSI sticks out at as one of the market's strongest value stocks.