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Are Investors Undervaluing Ameriprise Financial Services (AMP) Right Now?

Zacks Equity Research

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 value investors might notice is Ameriprise Financial Services (AMP). AMP is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 8.45, which compares to its industry's average of 12.01. Over the past year, AMP's Forward P/E has been as high as 9.50 and as low as 5.89, with a median of 8.23.

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. AMP has a P/S ratio of 1.5. This compares to its industry's average P/S of 2.62.

Finally, investors should note that AMP has a P/CF ratio of 9.57. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. AMP's current P/CF looks attractive when compared to its industry's average P/CF of 17.67. Over the past 52 weeks, AMP's P/CF has been as high as 11.44 and as low as 6.51, with a median of 9.41.

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


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