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.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company to watch right now 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 13.42. AMP's Forward P/E has been as high as 15.63 and as low as 10.72, with a median of 13.43, all within the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. AMP has a P/S ratio of 2.28. This compares to its industry's average P/S of 3.45.
Finally, our model also underscores that AMP has a P/CF ratio of 15.60. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. AMP's current P/CF looks attractive when compared to its industry's average P/CF of 34.21. Within the past 12 months, AMP's P/CF has been as high as 23.08 and as low as 14.74, with a median of 17.06.
Value investors will likely look at more than just these metrics, but the above data helps show that Ameriprise Financial is likely undervalued currently. And when considering the strength of its earnings outlook, AMP sticks out as one of the market's strongest value stocks.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Ameriprise Financial, Inc. (AMP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
