Are Investors Undervaluing Aaron's (AAN) Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
Aaron's (AAN) is a stock many investors are watching right now. AAN is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 10.09, which compares to its industry's average of 11.18. Over the past 52 weeks, AAN's Forward P/E has been as high as 12.83 and as low as 4.30, with a median of 7.08.
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. AAN has a P/S ratio of 0.17. This compares to its industry's average P/S of 0.5.
Investors could also keep in mind SP Plus (SP), an Consumer Services - Miscellaneous stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
SP Plus sports a P/B ratio of 3.30 as well; this compares to its industry's price-to-book ratio of 4.31. In the past 52 weeks, SP's P/B has been as high as 3.58, as low as 2.82, with a median of 3.17.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Aaron's and SP Plus are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AAN and SP feels like a great value stock at the moment.
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
The Aaron's Company, Inc. (AAN) : Free Stock Analysis Report
SP Plus Corporation (SP) : Free Stock Analysis Report
