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 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 Affiliated Managers Group (AMG). AMG is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 9.11, which compares to its industry's average of 13.43. AMG's Forward P/E has been as high as 9.17 and as low as 6.14, with a median of 7.88, all within the past year.
Investors should also note that AMG holds a PEG ratio of 0.58. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. AMG's PEG compares to its industry's average PEG of 0.91. AMG's PEG has been as high as 0.71 and as low as 0.50, with a median of 0.59, all within the past year.
Another notable valuation metric for AMG is its P/B ratio of 1.67. 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 2.85. AMG's P/B has been as high as 1.68 and as low as 1.01, with a median of 1.30, over the past year.
Finally, investors will want to recognize that AMG has a P/CF ratio of 13.64. 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. AMG's P/CF compares to its industry's average P/CF of 33.45. Within the past 12 months, AMG's P/CF has been as high as 13.72 and as low as 8.46, with a median of 11.07.
If you're looking for another solid Financial - Investment Management value stock, take a look at Ameriprise Financial (AMP). AMP is a Zacks Rank of #2 (Buy) stock with a Value score of A.
Ameriprise Financial is trading at a forward earnings multiple of 12.26 at the moment, with a PEG ratio of 0.98. This compares to its industry's average P/E of 13.43 and average PEG ratio of 0.91.
AMP's price-to-earnings ratio has been as high as 15.63 and as low as 10.72, with a median of 13.43, while its PEG ratio has been as high as 1.96 and as low as 0.73, with a median of 1.04, all within the past year.
Ameriprise Financial also has a P/B ratio of 7.59 compared to its industry's price-to-book ratio of 2.85. Over the past year, its P/B ratio has been as high as 10.67, as low as 7.41, with a median of 8.92.
These are just a handful of the figures considered in Affiliated Managers Group and Ameriprise Financial's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that AMG and AMP is an impressive value stock right now.
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Affiliated Managers Group, Inc. (AMG): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).