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Are Investors Undervaluing China Life (LFC) 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.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One stock to keep an eye on is China Life (LFC). LFC is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 7.03, while its industry has an average P/E of 8.52. LFC's Forward P/E has been as high as 12.08 and as low as 6.11, with a median of 8.73, all within the past year.

Investors should also recognize that LFC has a P/B ratio of 0.98. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.32. Over the past year, LFC's P/B has been as high as 1.27 and as low as 0.81, with a median of 1.05.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. 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 0.53. This compares to its industry's average P/S of 0.79.

These are just a handful of the figures considered in China Life's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that LFC is an impressive value stock right now.


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China Life Insurance Company Limited (LFC): Free Stock Analysis Report
 
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