Are Investors Undervaluing WPP (WPP) Right Now?
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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is WPP (WPP). WPP is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 9.12. This compares to its industry's average Forward P/E of 10.23. WPP's Forward P/E has been as high as 9.55 and as low as 7.13, with a median of 8.23, all within the past year.
Investors should also recognize that WPP has a P/B ratio of 2.39. 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 stock's P/B looks attractive against its industry's average P/B of 6.05. Within the past 52 weeks, WPP's P/B has been as high as 2.47 and as low as 1.81, with a median of 2.15.
These are just a handful of the figures considered in WPP's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that WPP is an impressive value stock right now.
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WPP PLC (WPP) : Free Stock Analysis Report