Is Heritage Insurance (HRTG) Stock Undervalued Right Now?

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company value investors might notice is Heritage Insurance (HRTG). HRTG is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value.

Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. HRTG has a P/S ratio of 1.18. This compares to its industry's average P/S of 1.32.

Finally, investors will want to recognize that HRTG has a P/CF ratio of 7.53. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 9.99. Over the past 52 weeks, HRTG's P/CF has been as high as 9.22 and as low as 3.66, with a median of 5.56.

United Fire Group (UFCS) may be another strong Insurance - Property and Casualty stock to add to your shortlist. UFCS is a Zacks Rank of #2 (Buy) stock with a Value grade of A.

Furthermore, United Fire Group holds a P/B ratio of 0.94 and its industry's price-to-book ratio is 1.40. UFCS's P/B has been as high as 1.02, as low as 0.62, with a median of 0.87 over the past 12 months.

These are only a few of the key metrics included in Heritage Insurance and United Fire Group strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, HRTG and UFCS look like an impressive value stock at the moment.

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

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