Is Federated Hermes (FHI) a Great Value Stock Right Now?
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.
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.
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.
One stock to keep an eye on is Federated Hermes (FHI). FHI is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 8.78 right now. For comparison, its industry sports an average P/E of 12.46. Over the past year, FHI's Forward P/E has been as high as 12.71 and as low as 5.18, with a median of 10.51.
FHI is also sporting a PEG ratio of 0.88. 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. FHI's industry currently sports an average PEG of 1.67. Within the past year, FHI's PEG has been as high as 2.25 and as low as 0.52, with a median of 1.06.
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. FHI has a P/S ratio of 1.59. This compares to its industry's average P/S of 1.96.
These are only a few of the key metrics included in Federated Hermes'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, FHI looks like an impressive value stock at the moment.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.