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Are Investors Undervaluing ABM Industries (ABM) Right Now?

Zacks Equity Research
·2 mins read

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.

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 ABM Industries (ABM). ABM 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 17.93 right now. For comparison, its industry sports an average P/E of 44.41. Over the last 12 months, ABM's Forward P/E has been as high as 22.74 and as low as 9.74, with a median of 17.93.

Finally, our model also underscores that ABM has a P/CF ratio of 33.41. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 41.80. Within the past 12 months, ABM's P/CF has been as high as 33.41 and as low as 5.55, with a median of 11.62.

These figures are just a handful of the metrics value investors tend to look at, but they help show that ABM Industries is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ABM feels like a great value stock at the moment.


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