Jul
16
Many investors like to look for value in stocks, but this can be
very tough to define. There is great debate regarding which metrics
are the best to focus on in this regard, and which are not really
quality indicators of future performance. Fortunately, with our new
style score system
we have identified the key statistics to pay close attention to and
thus which stocks might be the best for value investors in the near
term.
This method discovered several great candidates for
value-oriented investors, but today let’s focus on
Grupo Financiero Galicia S.A.
(
GGAL
) as this stock is looking especially impressive right now. And
while there are numerous reasons why this is the case, we have
highlighted three of the most vital reasons for GGAL’s status as a
solid value stock below:
Forward PE for Grupo Financiero Galicia
Easily one of the most popular readings for value investors, the
forward PE ratio shows us the current price of a stock divided by
the full year earnings. Generally speaking, value investors like to
see this ratio below 20, though it can vary by industry.
Right now, GGAL has a forward PE of just 7.15, which means that
investors are paying $7.15 dollars for each dollar in expected
Grupo Financiero Galicia
earnings this year. Compared to the industry at large this is
pretty favorable as the overall space has an average PE of 11.25 in
comparison.
Price/Cash Flow for Grupo Financiero Galicia
Stock
An often overlooked ratio that can still be a great indicator of
value is the price/cash flow metric. This reading is preferred by
some since it avoids amortization and depreciation concerns and can
give a more accurate picture of the financial health in a
business.
The P/CF ratio for GGAL comes in at 6.31, and since investors
are generally looking for a reading under 20 here, this is pretty
good news. Meanwhile, we should also point out that the industry
average for this metric is 9.52, so Grupo Financiero Galicia
has its peers beat in this regard too.
GGAL Earnings Estimate Revisions Moving in the Right
Direction
The solid value ratios outlined in the preceding paragraphs
might be enough for some investors, but we should also note that
the earnings estimate revisions have been trending in a positive
direction as well. Analysts who follow GGAL stock have been raising
their estimates for the company lately, meaning that the EPS
picture is looking a bit more favorably for Grupo Financiero
Galicia
now.
Over the past 30 days 1 earnings estimate has gone higher
compared to none lower for the full year, while we are also seeing
1 upward revision for the next year compared to none lower in the
same time frame. These revisions have helped to boost the consensus
estimate as 30 days ago GGAL
was expected to post earnings of $2.77 per share for the full year
though today it looks to have EPS of $2.82 for the full year.
Bottom Line
For the reasons detailed above, investors shouldn’t be surprised
to read that we have GGAL as a stock with a Value Score of ‘A
‘
and a Zacks Rank #1 (Strong Buy). So if you are a value investor,
definitely keep GGAL on your short list as this looks be a stock
that is very well-positioned for gains in the near term.
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
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
GRUPO GALIC ADR (GGAL): Free Stock Analysis
Report
To read this article on Zacks.com click here.
Open all references in tabs: [1 – 7]
Comments
Leave a Reply
You must be logged in to post a comment.