Should Value Investors Buy AllianceBernstein (AB) Stock?
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 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 to watch right now is AllianceBernstein (AB). AB is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 11.52, which compares to its industry's average of 12.73. Over the last 12 months, AB's Forward P/E has been as high as 12.30 and as low as 10.12, with a median of 11.03.
Investors should also recognize that AB has a P/B ratio of 1.89. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. AB's current P/B looks attractive when compared to its industry's average P/B of 2.23. Over the past year, AB's P/B has been as high as 1.89 and as low as 1.49, with a median of 1.64.
Finally, investors will want to recognize that AB has a P/CF ratio of 13.28. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. AB's current P/CF looks attractive when compared to its industry's average P/CF of 17.92. Over the past 52 weeks, AB's P/CF has been as high as 13.28 and as low as 10.69, with a median of 11.82.
These figures are just a handful of the metrics value investors tend to look at, but they help show that AllianceBernstein is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AB feels like a great value stock at the moment.
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