Trump Trade Sparks Biggest Financial Stock Inflows In 2 Years

Investors interested in stocks from the Financial - Investment Management sector have probably already heard of T. Rowe Price (TROW) and Ares Management (ARES). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, T. Rowe Price is sporting a Zacks Rank of #2 (Buy), while Ares Management has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that TROW has an improving earnings outlook. But this is just one piece of the puzzle for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

TROW currently has a forward P/E ratio of 12.62, while ARES has a forward P/E of 41.83. We also note that TROW has a PEG ratio of 1.71. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ARES currently has a PEG ratio of 1.87.

Another notable valuation metric for TROW is its P/B ratio of 2.50. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, ARES has a P/B of 10.24.

These metrics, and several others, help TROW earn a Value grade of B, while ARES has been given a Value grade of F.

TROW has seen stronger estimate revision activity and sports more attractive valuation metrics than ARES, so it seems like value investors will conclude that TROW is the superior option right now.

Zacks Investment Research

Investors with an interest in Insurance - Property and Casualty stocks have likely encountered both Travelers (TRV) and CCC Intelligent Solutions Holdings Inc. (CCCS). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, Travelers has a Zacks Rank of #2 (Buy), while CCC Intelligent Solutions Holdings Inc. has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that TRV likely has seen a stronger improvement to its earnings outlook than CCCS has recently. But this is just one factor that value investors are interested in.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

TRV currently has a forward P/E ratio of 13.86, while CCCS has a forward P/E of 30.96. We also note that TRV has a PEG ratio of 1.24. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CCCS currently has a PEG ratio of 2.84.

Another notable valuation metric for TRV is its P/B ratio of 2.11. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, CCCS has a P/B of 3.68.

These metrics, and several others, help TRV earn a Value grade of A, while CCCS has been given a Value grade of F.

TRV has seen stronger estimate revision activity and sports more attractive valuation metrics than CCCS, so it seems like value investors will conclude that TRV is the superior option right now.

Zacks Investment Research

Robinhood Markets, Inc. HOOD shares have surged 30% since the beginning of this month and touched a 52-week high of $30.63 during Friday’s trading session. Over the past three months, the stock has surged 64.7%, outperforming the industry, the S&P 500 Index and its close peers — The Charles Schwab Corporation SCHW and LPL Financial Holdings Inc. LPLA.

Three-Month Price Performance

Does HOOD stock have more upside left despite hitting a 52-week high? Let’s try to decipher that.

Factors Likely to Drive Robinhood Stock Higher

Presidential Election Results to Aid Revenues: On Nov. 5, U.S. presidential elections were held, resulting in a victory for Donald Trump. Given the favorable stance of the new regime toward cryptocurrencies, Bitcoin rose to an all-time high.

This will aid Robinhood’s cryptocurrency revenues as new investors will be attracted to the cryptocurrencies to boost their returns and leverage the benefit of diversification as an asset class as well. During the first nine months of 2024, the company’s cryptocurrency revenues were $268 million, constituting 13.8% of total net revenues. Over four years (2019-2023), the metric witnessed a 94.2% compound annual growth rate (CAGR).

Transaction-Based Revenues Components

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company value investors might notice is NMI (NMIH). NMIH is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Another valuation metric that we should highlight is NMIH's P/B ratio of 1.45. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. NMIH's current P/B looks attractive when compared to its industry's average P/B of 1.64. Within the past 52 weeks, NMIH's P/B has been as high as 1.63 and as low as 1.20, with a median of 1.33.

Finally, investors should note that NMIH has a P/CF ratio of 8.37. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. NMIH's P/CF compares to its industry's average P/CF of 11.93. NMIH's P/CF has been as high as 9.38 and as low as 6.91, with a median of 7.70, all within the past year.

The Travelers Companies (TRV) may be another strong Insurance - Property and Casualty stock to add to your shortlist. TRV is a # 2 (Buy) stock with a Value grade of A.

The Travelers Companies is trading at a forward earnings multiple of 12.53 at the moment, with a PEG ratio of 1.12. This compares to its industry's average P/E of 28.75 and average PEG ratio of 2.89.

TRV's price-to-earnings ratio has been as high as 17.36 and as low as 10.57, with a median of 11.61, while its PEG ratio has been as high as 1.71 and as low as 0.98, with a median of 1.07, all within the past year.

Additionally, The Travelers Companies has a P/B ratio of 2.07 while its industry's price-to-book ratio sits at 1.64. For TRV, this valuation metric has been as high as 2.22, as low as 1.75, with a median of 1.99 over the past year.

These figures are just a handful of the metrics value investors tend to look at, but they help show that NMI and The Travelers Companies are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, NMIH and TRV feels like a great value stock at the moment.

Zacks Investment Research

Financial stocks were advancing premarket Monday with the Financial Select Sector SPDR Fund over 1% higher recently.

The Direxion Daily Financial Bull 3X Shares was up 3% and its bearish counterpart Direxion Daily Financial Bear 3X Shares was 3% lower.

Deutsche Bank fired 111 senior managers in its retail and private wealth business on Monday, the Financial Times reported, as the company aims to reduce its cost-to-income ratio to between 60% and 65% in 2025. Deutsche Bank shares were up 2% pre-bell.

Tradeweb Markets shares were 0.7% lower after the company said it is working with the Tokyo Stock Exchange to improve liquidity access for institutional investors in Japanese exchange-traded funds.