Should Value Investors Buy American Equity Investment (AEL) Stock?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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.
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.
American Equity Investment (AEL) is a stock many investors are watching right now. AEL is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock holds a P/E ratio of 6.92, while its industry has an average P/E of 8.62. Over the last 12 months, AEL's Forward P/E has been as high as 9.28 and as low as 5.14, with a median of 7.16.
We should also highlight that AEL has a P/B ratio of 0.63. 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 1.74. Over the past 12 months, AEL's P/B has been as high as 1.26 and as low as 0.48, with a median of 0.89.
Finally, investors will want to recognize that AEL has a P/CF ratio of 7.42. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 15.30. AEL's P/CF has been as high as 7.44 and as low as 1.97, with a median of 3.79, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that American Equity Investment is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AEL feels like a great value stock at the moment.
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American Equity Investment Life Holding Company (AEL) : Free Stock Analysis Report
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