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Is Ally Financial (ALLY) a Great Value Stock Right Now?

Zacks Equity Research
·2-min read

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 company value investors might notice is Ally Financial (ALLY). ALLY is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 7.21, which compares to its industry's average of 7.25. Over the past 52 weeks, ALLY's Forward P/E has been as high as 10.49 and as low as 6.76, with a median of 8.71.

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Finally, investors will want to recognize that ALLY has a P/CF ratio of 4.60. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 5.41. Over the past year, ALLY's P/CF has been as high as 6.59 and as low as 4.17, with a median of 4.87.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Ally Financial is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ALLY feels like a great value stock at the moment.


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Zacks Investment Research