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Is AllianceBernstein (AB) 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.

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 stock to keep an eye on is AllianceBernstein (AB). AB is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 11.18, while its industry has an average P/E of 13.43. Over the past 52 weeks, AB's Forward P/E has been as high as 12.79 and as low as 9.90, with a median of 11.26.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. AB has a P/S ratio of 0.91. This compares to its industry's average P/S of 2.52.

Finally, investors should note that AB has a P/CF ratio of 14.03. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. AB's current P/CF looks attractive when compared to its industry's average P/CF of 17.67. Within the past 12 months, AB's P/CF has been as high as 14.03 and as low as 10.87, with a median of 12.20.

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


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