Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 to watch right now is Aaron's (AAN). AAN is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
We also note that AAN holds a PEG ratio of 1.05. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. AAN's industry has an average PEG of 1.18 right now. Over the past 52 weeks, AAN's PEG has been as high as 1.05 and as low as 0.75, with a median of 0.94.
Another valuation metric that we should highlight is AAN's P/B ratio of 2.82. The P/B ratio is used to compare a stock's market value with 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 4.05. AAN's P/B has been as high as 2.82 and as low as 1.54, with a median of 2.05, over the past year.
Finally, we should also recognize that AAN has a P/CF ratio of 2.46. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 6.70. Within the past 12 months, AAN's P/CF has been as high as 2.46 and as low as 1.34, with a median of 1.81.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Aaron's is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AAN feels like a great value stock at the moment.
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Aaron's, Inc. (AAN) : Free Stock Analysis Report
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