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.
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 a P/E ratio of 12.26, which compares to its industry's average of 12.66. 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.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. 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 2.29. This compares to its industry's average P/S of 2.7.
Finally, our model also underscores 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 29.34. 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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