Should Value Investors Buy SK Telecom Co. (SKM) Stock?

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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 value investors might notice is SK Telecom Co. (SKM). SKM is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 11.1, which compares to its industry's average of 12.21. Over the past year, SKM's Forward P/E has been as high as 11.82 and as low as 8.35, with a median of 9.75.

Another notable valuation metric for SKM is its P/B ratio of 1.03. 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 solid versus its industry's average P/B of 1.42. Over the past year, SKM's P/B has been as high as 1.12 and as low as 0.94, with a median of 1.02.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. SKM has a P/S ratio of 0.99. This compares to its industry's average P/S of 1.45.

These figures are just a handful of the metrics value investors tend to look at, but they help show that SK Telecom Co. is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SKM 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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