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Is AB Volvo (VLVLY) Stock Undervalued Right Now?

Zacks Equity Research
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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 value investors might notice is AB Volvo (VLVLY). VLVLY is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 8.88 right now. For comparison, its industry sports an average P/E of 10.21. Over the past year, VLVLY's Forward P/E has been as high as 12.31 and as low as 7.61, with a median of 9.66.

Another valuation metric that we should highlight is VLVLY's P/B ratio of 2.18. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 2.26. Over the past year, VLVLY's P/B has been as high as 2.68 and as low as 1.82, with a median of 2.27.

These are only a few of the key metrics included in AB Volvo'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, VLVLY looks like an impressive value stock at the moment.


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