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Is Hilltop Holdings (HTH) a Great Value Stock Right Now?

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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 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.

Hilltop Holdings (HTH - Free Report) is a stock many investors are watching right now. HTH is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 7.96 right now. For comparison, its industry sports an average P/E of 13.01. Over the past 52 weeks, HTH's Forward P/E has been as high as 13.70 and as low as 6.38, with a median of 12.19.

We should also highlight that HTH has a P/B ratio of 0.67. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.65. HTH's P/B has been as high as 1.15 and as low as 0.50, with a median of 1.01, over the past year.

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. HTH has a P/S ratio of 0.75. This compares to its industry's average P/S of 1.68.

Finally, investors will want to recognize that HTH has a P/CF ratio of 6.25. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 13.42. Over the past 52 weeks, HTH's P/CF has been as high as 15.35 and as low as 4.74, with a median of 11.69.

These are only a few of the key metrics included in Hilltop Holdings'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, HTH looks like an impressive value stock at the moment.


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