Should Value Investors Buy Noah Holdings (NOAH) Stock?
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.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 Noah Holdings (NOAH). NOAH is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 4.36, which compares to its industry's average of 11.99. Over the last 12 months, NOAH's Forward P/E has been as high as 13.82 and as low as 4.17, with a median of 8.55.
Investors will also notice that NOAH has a PEG ratio of 0.43. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. NOAH's PEG compares to its industry's average PEG of 0.78. Within the past year, NOAH's PEG has been as high as 0.67 and as low as 0.38, with a median of 0.49.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. NOAH has a P/S ratio of 1.66. This compares to its industry's average P/S of 2.63.
Finally, investors will want to recognize that NOAH has a P/CF ratio of 4.89. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 15.07. NOAH's P/CF has been as high as 9.52 and as low as -54.29, with a median of 5.36, all within the past year.
These are just a handful of the figures considered in Noah Holdings's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that NOAH is an impressive value stock right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Noah Holdings Ltd. (NOAH) : Free Stock Analysis Report
To read this article on Zacks.com click here.
