Is China Construction Bank (CICHY) Stock Undervalued Right Now?

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, 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company to watch right now is China Construction Bank (CICHY). CICHY is currently sporting a Zacks Rank #2 (Buy) and an A for Value.

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 preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CICHY has a P/S ratio of 1.68. This compares to its industry's average P/S of 2.21.

These figures are just a handful of the metrics value investors tend to look at, but they help show that China Construction Bank is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CICHY feels like a great value stock at the moment.

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This article originally published on Zacks Investment Research (zacks.com).

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