Should Value Investors Buy These Finance Stocks?

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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.

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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 to watch right now is Stewart Information Services (STC). STC 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 11.55 right now. For comparison, its industry sports an average P/E of 27.88. Over the past 52 weeks, STC's Forward P/E has been as high as 12.15 and as low as 7.85, with a median of 9.34.

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. STC has a P/S ratio of 0.65. This compares to its industry's average P/S of 0.99.

If you're looking for another solid Insurance - Property and Casualty value stock, take a look at Universal Insurance Holdings (UVE). UVE is a # 2 (Buy) stock with a Value score of A.

Furthermore, Universal Insurance Holdings holds a P/B ratio of 0.98 and its industry's price-to-book ratio is 1.23. UVE's P/B has been as high as 1.15, as low as 0.82, with a median of 0.96 over the past 12 months.

These are only a few of the key metrics included in Stewart Information Services and Universal Insurance Holdings strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, STC and UVE look like an impressive value stock at the moment.


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Stewart Information Services Corporation (STC) : Free Stock Analysis Report
 
UNIVERSAL INSURANCE HOLDINGS INC (UVE) : Free Stock Analysis Report
 
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