Is Franklin Resources (BEN) Stock Undervalued Right Now?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 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 company value investors might notice is Franklin Resources (BEN). BEN is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 8.06, which compares to its industry's average of 12.30. Over the past 52 weeks, BEN's Forward P/E has been as high as 12.82 and as low as 6.66, with a median of 10.10.
We should also highlight that BEN has a P/B ratio of 1.03. The P/B ratio is used to compare a stock's market value with 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 1.96. Over the past year, BEN's P/B has been as high as 1.37 and as low as 0.70, with a median of 0.98.
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. BEN has a P/S ratio of 1.73. This compares to its industry's average P/S of 2.18.
Finally, we should also recognize that BEN has a P/CF ratio of 9.26. 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 stock's P/CF looks attractive against its industry's average P/CF of 36.66. BEN's P/CF has been as high as 10.52 and as low as 5.21, with a median of 8.58, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Franklin Resources is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BEN feels like a great 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.