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Are Investors Undervaluing Atlas Financial (AFH) Right Now?

Advanced Micro Devices (AMD) closed the most recent trading day at $19.90, moving +0.2% from the previous trading session.

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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

One stock to keep an eye on is Atlas Financial (AFH). AFH is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

Another notable valuation metric for AFH is its P/B ratio of 1.11. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.35. Within the past 52 weeks, AFH's P/B has been as high as 2.83 and as low as 1, with a median of 1.37.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. AFH has a P/S ratio of 0.5. This compares to its industry's average P/S of 1.14.

These are only a few of the key metrics included in Atlas Financial's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, AFH looks like an impressive value stock at the moment.


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