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Are Investors Undervaluing American Financial Group (AFG) Right Now?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

American Financial Group (AFG) is a stock many investors are watching right now. AFG is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 13.02. This compares to its industry's average Forward P/E of 28.45. AFG's Forward P/E has been as high as 1,155.88 and as low as 12.96, with a median of 14.33, all within the past year.

Finally, investors should note that AFG has a P/CF ratio of 6.20. 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. AFG's current P/CF looks attractive when compared to its industry's average P/CF of 6.93. AFG's P/CF has been as high as 6.99 and as low as 3.91, with a median of 4.88, all within the past year.

Another great Insurance - Property and Casualty stock you could consider is Argo Group (ARGO), which is a # 2 (Buy) stock with a Value Score of A.

Argo Group also has a P/B ratio of 0.99 compared to its industry's price-to-book ratio of 1.26. Over the past year, its P/B ratio has been as high as 1.32, as low as 0.82, with a median of 1.08.

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


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American Financial Group, Inc. (AFG) : Free Stock Analysis Report
 
Argo Group International Holdings, Ltd. (ARGO) : Free Stock Analysis Report
 
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