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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 to watch right now is Allstate (ALL). ALL is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. ALL has a P/S ratio of 0.82. This compares to its industry's average P/S of 1.25.
Finally, investors should note that ALL has a P/CF ratio of 8.66. 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. ALL's P/CF compares to its industry's average P/CF of 12.60. ALL's P/CF has been as high as 14.16 and as low as 8.07, with a median of 10.58, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Allstate is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ALL feels like a great value stock at the moment.
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The Allstate Corporation (ALL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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