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When analysts rate a company's stock as a 'Strong Buy', it means that there are a variety of things that the company is doing right. It also means that there is confidence that the stock's worth is going to increase. Today we focus on financial stocks sporting some of the highest analyst ratings, but that also seem undervalued from a price-multiple standpoint. We came up with a rather diverse list of financial companies, but we think we've found some winners.

The Price/Sales ratio is a price-multiple valuation metric used to help identify if a firm is cheap by its twelve month trailing sales numbers. In the most basic terms it let's an investor know how much the investment community is willing to pay for every dollars worth of sales. A firm with a P/S ratio of one or lower would be viewed as cheap because investors are paying $1 or less for every dollars worth of a firm's sales. On the other hand, a firm is generally considered to be expensive when the P/S ratio is above three. These are general guidelines used by the investment community not hard rules to be clear.

Price/Sales Ratio = Current Stock Price/Revenue (sales) per Share

The Price/Book Value Ratio is a great price-multiple valuation metric to find companies that could be potentially undervalued or overvalued. If a firm has a Price/Book Value Ratio of less than 1 it is stated to be trading below "break up" value. A lower P/BV Ratio can indicate a potentially mispriced company or indicate that something is fundamentally wrong with it.

We first looked for financial stocks. We next screened for businesses that are trading at a discount (P/S<1)(P/BV<1). Next, we then screened for businesses that analysts rate as "Strong Buy" (mean recommendation < 2). We did not screen out any market caps.

Do you think these stocks offer both value and growth? Please use our list to assist with your own analysis.

1) PHH Corporation (PHH)

Sector:Financial
Industry:Credit Services
Market Cap:$961.35M
Beta:1.48

PHH Corporation has a Price/Sales Ratio of 0.41, a Price/Book Value Ratio of 0.62, and a Analysts' Rating of 1.50. The short interest was 18.61% as of 07/15/2012. PHH Corporation provides business process management services for the mortgage and fleet industries in the United States and Canada. Its Mortgage Production segment provides private-label mortgage services to financial institutions and real estate brokers; originates, purchases, and sells mortgage loans; offers appraisal, credit research, flood certification, and tax services. Its Mortgage Servicing segment engages in collecting loan payments; remitting principal and interest payments to investors; managing escrow funds for the payment of mortgage-related expenses, such as taxes and insurance; and performing loss mitigation activities on behalf of investors.

2) ING Groep NV (ING)

Sector:Financial
Industry:Life Insurance
Market Cap:$24.78B
Beta:2.79

ING Groep NV has a Price/Sales Ratio of 0.39, a Price/Book Value Ratio of 0.39, and a Analysts' Rating of 1.50. The short interest was 0.21% as of 07/15/2012. ING Groep N.V. operates as a financial services company that provides banking, investments, life insurance, and retirement services worldwide.

3) Banco Santander-Chile (SAN)

Sector:Financial
Industry:Foreign Money Center Banks
Market Cap:$1.04B
Beta:0.87

Banco Santander-Chile has a Price/Sales Ratio of 0.31, a Price/Book Value Ratio of 0.25, and a Analysts' Rating of 1.50. The short interest was 59.81% as of 07/15/2012. Banco Santander, S.A. provides a range of banking and financial products.

4) Barclays PLC (BCS)

Sector:Financial
Industry:Foreign Money Center Banks
Market Cap:$31.32B
Beta:2.62

Barclays PLC has a Price/Sales Ratio of 0.98, a Price/Book Value Ratio of 0.36, and a Analysts' Rating of 1.30. The short interest was 0.32% as of 07/15/2012. Barclays PLC provides various financial products and services worldwide. It offers retail and commercial banking, credit cards, investment banking, wealth management, and investment management services. The company's personal banking products include bank accounts, a range of credit cards through Barclaycard, savings accounts, loans, insurance, online banking, and mortgages through Woolwich.

5) American Equity Investment Life Holding Co. (AEL)

Sector:Financial
Industry:Life Insurance
Market Cap:$680.09M
Beta:1.73

American Equity Investment Life Holding Co. has a Price/Sales Ratio of 0.53, a Price/Book Value Ratio of 0.48, and a Analysts' Rating of 1.50. The short interest was 16.08% as of 07/15/2012. American Equity Investment Life Holding Company, through its subsidiaries, underwrites fixed annuity and life insurance products in the United States and the District of Columbia. Its annuity products include fixed index annuities and fixed rate annuities, as well as single premium immediate annuities. The company's life insurance products comprise traditional ordinary and term, universal life, and other interest-sensitive life insurance products. It also collects annuity deposits and insurance premiums.

*Company profiles were sourced from Finviz. Financial data was sourced from Google Finance and Yahoo Finance.

Source: 5 Financial Stocks Trading For Cheap Despite Strong Analyst Confidence