Yahoo Finance Are These Finance Stocks Undervalued Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is Affiliated Managers Group (AMG). AMG is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 8.54, which compares to its industry's average of 12.30. Over the past year, AMG's Forward P/E has been as high as 10.30 and as low as 6.54, with a median of 8.79.
Investors will also notice that AMG has a PEG ratio of 0.57. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. AMG's industry currently sports an average PEG of 0.88. Within the past year, AMG's PEG has been as high as 0.68 and as low as 0.50, with a median of 0.57.
Investors should also recognize that AMG has a P/B ratio of 2.24. 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 stock's P/B looks attractive against its industry's average P/B of 2.97. AMG's P/B has been as high as 2.45 and as low as 1.16, with a median of 2.05, over the past year.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. AMG has a P/S ratio of 3.11. This compares to its industry's average P/S of 3.43.
Finally, investors will want to recognize that AMG has a P/CF ratio of 13.97. 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. AMG's current P/CF looks attractive when compared to its industry's average P/CF of 15.19. Over the past year, AMG's P/CF has been as high as 19.96 and as low as 11.84, with a median of 14.14.
Grupo Aval Acciones y Valores (AVAL) may be another strong Financial - Investment Management stock to add to your shortlist. AVAL is a # 2 (Buy) stock with a Value grade of A.
Grupo Aval Acciones y Valores also has a P/B ratio of 0.53 compared to its industry's price-to-book ratio of 2.97. Over the past year, its P/B ratio has been as high as 0.73, as low as 0.51, with a median of 0.62.
These are only a few of the key metrics included in Affiliated Managers Group and Grupo Aval Acciones y Valores strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, AMG and AVAL look like an impressive value stock at the moment.
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Affiliated Managers Group, Inc. (AMG) : Free Stock Analysis Report
Grupo Aval Acciones y Valores S.A. (AVAL) : Free Stock Analysis Report
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