Are Investors Undervaluing Autoliv (ALV) Right Now?
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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader 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.
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 stock to keep an eye on is Autoliv (ALV). ALV is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 12.87, while its industry has an average P/E of 20.50. ALV's Forward P/E has been as high as 18.36 and as low as 9.87, with a median of 11.99, all within the past year.
Investors should also note that ALV holds a PEG ratio of 0.63. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ALV's PEG compares to its industry's average PEG of 0.98. Within the past year, ALV's PEG has been as high as 0.64 and as low as 0.50, with a median of 0.55.
We should also highlight that ALV has a P/B ratio of 3.42. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 3.60. Over the past 12 months, ALV's P/B has been as high as 3.45 and as low as 2.27, with a median of 2.83.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. ALV has a P/S ratio of 0.88. This compares to its industry's average P/S of 0.89.
Value investors will likely look at more than just these metrics, but the above data helps show that Autoliv is likely undervalued currently. And when considering the strength of its earnings outlook, ALV sticks out at as one of the market's strongest value stocks.
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Autoliv, Inc. (ALV) : Free Stock Analysis Report
