Are Investors Undervaluing AngloGold Ashanti PLC (AU) Right Now?

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.

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 company to watch right now is AngloGold Ashanti PLC (AU). AU is currently sporting a Zacks Rank #1 (Strong Buy), as well as a Value grade of A. The stock holds a P/E ratio of 10.37, while its industry has an average P/E of 14.08. Over the past year, AU's Forward P/E has been as high as 17.93 and as low as 7.27, with a median of 9.72.

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 preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. AU has a P/S ratio of 3.07. This compares to its industry's average P/S of 3.42.

These are only a few of the key metrics included in AngloGold Ashanti PLC's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, AU looks like an impressive value stock at the moment.

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This article originally published on Zacks Investment Research (zacks.com).

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