Are Investors Undervaluing These Finance Stocks Right Now?
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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 Atlas (ATCO). ATCO is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 8.18, which compares to its industry's average of 13.72. ATCO's Forward P/E has been as high as 12.69 and as low as 7.18, with a median of 10.10, all within the past year.
We also note that ATCO holds a PEG ratio of 0.29. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ATCO's PEG compares to its industry's average PEG of 0.74. ATCO's PEG has been as high as 0.92 and as low as 0.26, with a median of 0.67, all within the past year.
Investors should also recognize that ATCO has a P/B ratio of 1.02. Investors use the P/B ratio to look at a stock's market value versus 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 2.88. ATCO's P/B has been as high as 1.12 and as low as 0.74, with a median of 0.95, over the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. ATCO has a P/S ratio of 2.24. This compares to its industry's average P/S of 3.05.
Finally, investors will want to recognize that ATCO has a P/CF ratio of 7.11. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 14.43. Over the past 52 weeks, ATCO's P/CF has been as high as 7.76 and as low as 4.71, with a median of 5.93.
Another great Financial - Investment Management stock you could consider is Invesco (IVZ), which is a # 2 (Buy) stock with a Value Score of A.
Shares of Invesco currently holds a Forward P/E ratio of 8.04, and its PEG ratio is 0.60. In comparison, its industry sports average P/E and PEG ratios of 13.72 and 0.74.
IVZ's price-to-earnings ratio has been as high as 10.04 and as low as 6.83, with a median of 8.52, while its PEG ratio has been as high as 1.60 and as low as 0.51, with a median of 1.18, all within the past year.
Invesco sports a P/B ratio of 0.95 as well; this compares to its industry's price-to-book ratio of 2.88. In the past 52 weeks, IVZ's P/B has been as high as 1.23, as low as 0.72, with a median of 1.
Value investors will likely look at more than just these metrics, but the above data helps show that Atlas and Invesco are likely undervalued currently. And when considering the strength of its earnings outlook, ATCO and IVZ sticks out as one of the market's strongest value stocks.
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