Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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.
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 stock to keep an eye on is Ameriprise Financial (AMP). AMP is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 12.26 right now. For comparison, its industry sports an average P/E of 15.97. Over the past 52 weeks, AMP's Forward P/E has been as high as 15.63 and as low as 10.72, with a median of 13.43.
We also note that AMP holds a PEG ratio of 0.98. 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. AMP's PEG compares to its industry's average PEG of 1.06. Over the past 52 weeks, AMP's PEG has been as high as 1.96 and as low as 0.73, with a median of 1.04.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. AMP has a P/S ratio of 2.5. This compares to its industry's average P/S of 3.19.
Finally, investors will want to recognize that AMP has a P/CF ratio of 15.60. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 40.37. Over the past 52 weeks, AMP's P/CF has been as high as 23.08 and as low as 14.74, with a median of 17.06.
These are just a handful of the figures considered in Ameriprise Financial's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that AMP is an impressive value stock right now.
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Ameriprise Financial, Inc. (AMP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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