U.S. markets closed

Is Affiliated Managers Group (AMG) Stock Undervalued Right Now?

Zacks Equity Research

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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

Affiliated Managers Group (AMG) is a stock many investors are watching right now. AMG is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 5.72, while its industry has an average P/E of 13.32. Over the last 12 months, AMG's Forward P/E has been as high as 7.94 and as low as 5.02, with a median of 6.08.

Investors should also note that AMG holds a PEG ratio of 0.57. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. AMG's PEG compares to its industry's average PEG of 1.37. Within the past year, AMG's PEG has been as high as 0.83 and as low as 0.50, with a median of 0.60.

Investors should also recognize that AMG has a P/B ratio of 1.11. 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. AMG's current P/B looks attractive when compared to its industry's average P/B of 1.84. Over the past year, AMG's P/B has been as high as 1.57 and as low as 0.97, with a median of 1.17.

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. AMG has a P/S ratio of 1.86. This compares to its industry's average P/S of 2.66.

Value investors will likely look at more than just these metrics, but the above data helps show that Affiliated Managers Group is likely undervalued currently. And when considering the strength of its earnings outlook, AMG sticks out at as one of the market's strongest value stocks.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Affiliated Managers Group, Inc. (AMG) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.