Is Aegion (AEGN) Stock Undervalued Right Now?
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.
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 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 Aegion (AEGN). AEGN is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
We should also highlight that AEGN has a P/B ratio of 1.42. 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. AEGN's current P/B looks attractive when compared to its industry's average P/B of 2. AEGN's P/B has been as high as 1.68 and as low as 0.99, with a median of 1.28, over the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. AEGN has a P/S ratio of 0.48. This compares to its industry's average P/S of 0.96.
Value investors will likely look at more than just these metrics, but the above data helps show that Aegion is likely undervalued currently. And when considering the strength of its earnings outlook, AEGN sticks out at as one of the market's strongest value stocks.
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