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Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Woori Bank (NYSE:WF) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Woori Bank has a trailing twelve months PE ratio of 8.8, as you can see in the chart below:
This has had a significant impact on the consensus estimate as the current quarter year estimate jumped 5.7% in the past two months, while the next year estimate has increased 5.5% over the same time frame. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Woori Bank Price and Consensus
This positive trend signifies bullish analyst sentiment, and its Zacks Rank #1 (Strong Buy) indicates robust fundamentals and expectations of outperformance in the near term.
Bottom Line
Woori Bank is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Furthermore, a strong industry rank (among Top 42% of more than 250 industries) and a Zacks Rank #1, instills our confidence on the stock.
In fact, over the past two years, its industry has clearly outperformed the market, as you can see below:
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