Are Investors Undervaluing First American Financial (FAF) Right Now?

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.First American Financial (FAF) is a stock many investors are watching right now. FAF is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 11.43. This compares to its industry's average Forward P/E of 27.93. Over the last 12 months, FAF's Forward P/E has been as high as 15.32 and as low as 9.75, with a median of 11.61. Investors should also recognize that FAF has a P/B ratio of 1.31. 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 attractive against its industry's average P/B of 1.46. Over the past year, FAF's P/B has been as high as 1.43 and as low as 1.08, with a median of 1.29.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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. FAF has a P/S ratio of 0.92. This compares to its industry's average P/S of 1.31.Investors could also keep in mind United Fire Group (UFCS), another Insurance - Property and Casualty stock with a Zacks Rank of #1 (Strong Buy) and Value grade of A.Furthermore, United Fire Group holds a P/B ratio of 0.94 and its industry's price-to-book ratio is 1.46. UFCS's P/B has been as high as 1.02, as low as 0.62, with a median of 0.87 over the past 12 months.These figures are just a handful of the metrics value investors tend to look at, but they help show that First American Financial and United Fire Group are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, FAF and UFCS feels like a great value stock at the moment.Radical New Technology Could Hand Investors Huge GainsQuantum Computing is the next technological revolution, and it could be even more advanced than AI.While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure.Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power.Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. Now, he has keyed in on what could be "the next big thing" in quantum computing supremacy. Today, you have a rare chance to position your portfolio at the forefront of this opportunity.See Top Quantum Stocks 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 First American Financial Corporation (FAF): Free Stock Analysis Report United Fire Group, Inc (UFCS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks