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Is China Life (LFC) a Great Value Stock 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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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 to watch right now is China Life (LFC). LFC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 6.85, while its industry has an average P/E of 8.43. Over the past year, LFC's Forward P/E has been as high as 12.08 and as low as 6.11, with a median of 8.46.

We should also highlight that LFC has a P/B ratio of 0.98. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. LFC's current P/B looks attractive when compared to its industry's average P/B of 1.32. LFC's P/B has been as high as 1.27 and as low as 0.81, with a median of 1.03, over the past year.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. LFC has a P/S ratio of 0.52. This compares to its industry's average P/S of 0.79.

These are only a few of the key metrics included in China Life's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, LFC looks like an impressive value stock at the moment.


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