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.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 Aaron's (AAN). AAN is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 13.05, which compares to its industry's average of 21.77. Over the last 12 months, AAN's Forward P/E has been as high as 17.65 and as low as 3.78, with a median of 13.33.
We also note that AAN holds a PEG ratio of 1.29. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. AAN's industry currently sports an average PEG of 2.44. Over the last 12 months, AAN's PEG has been as high as 1.67 and as low as 0.28, with a median of 0.85.
Finally, our model also underscores that AAN has a P/CF ratio of 1.93. 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. This stock's P/CF looks attractive against its industry's average P/CF of 6.82. AAN's P/CF has been as high as 2.63 and as low as 0.57, with a median of 1.98, all within the past year.
These are just a handful of the figures considered in Aaron's'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 AAN is an impressive value stock right now.
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Aarons, Inc. (AAN) : Free Stock Analysis Report
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