Investors looking for stocks in the Financial - Miscellaneous Services sector might want to consider either Virtu Financial (VIRT) or American Express (AXP). But which of these two companies is the best option for those looking for undervalued stocks? 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Virtu Financial and American Express are sporting Zacks Ranks of #1 (Strong Buy) and #2 (Buy), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that VIRT is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

VIRT currently has a forward P/E ratio of 9.91, while AXP has a forward P/E of 19.64. We also note that VIRT has a PEG ratio of 1.19. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. AXP currently has a PEG ratio of 1.44.

Another notable valuation metric for VIRT is its P/B ratio of 3.78. 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. For comparison, AXP has a P/B of 7.01.

These are just a few of the metrics contributing to VIRT's Value grade of A and AXP's Value grade of C.

VIRT sticks out from AXP in both our Zacks Rank and Style Scores models, so value investors will likely feel that VIRT is the better option right now.

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Virtu Financial, Inc. (VIRT) : Free Stock Analysis Report

American Express Company (AXP) : Free Stock Analysis Report

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

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