Are Investors Undervaluing China Life (LFC) Right Now?

By Zacks Investment ResearchStock MarketsMar 02, 2020 11:50PM ET

www.investing.com/analysis/are-investors-undervaluing-china-life-lfc-right-now-200512836

Are Investors Undervaluing China Life (LFC) Right Now?

By Zacks Investment Research | Mar 02, 2020 11:50PM ET

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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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

China Life (LFC) is a stock many investors are watching right now. LFC 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 8.61, which compares to its industry's average of 9.37. Over the last 12 months, LFC's Forward P/E has been as high as 22.53 and as low as 8.01, with a median of 10.43.

We should also highlight that LFC has a P/B ratio of 1.19. The P/B is a method of comparing a stock's market value to 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 1.79. LFC's P/B has been as high as 1.67 and as low as 1.14, with a median of 1.29, over the past year.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. LFC has a P/S ratio of 0.65. This compares to its industry's average P/S of 0.66.

These are only a few of the key metrics included in China Life'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, LFC looks like an impressive value stock at the moment.

China Life Insurance Company Limited (LFC): Free Stock Analysis Report

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Are Investors Undervaluing China Life (LFC) Right Now?

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