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.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 company value investors might notice is Alamo Group (ALG). ALG is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 16.83. This compares to its industry's average Forward P/E of 27.21. ALG's Forward P/E has been as high as 19.88 and as low as 13.85, with a median of 16.77, all within the past year.
Investors will also notice that ALG has a PEG ratio of 0.94. 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. ALG's PEG compares to its industry's average PEG of 2.07. Over the past 52 weeks, ALG's PEG has been as high as 1.10 and as low as 0.94, with a median of 1.02.
Value investors will likely look at more than just these metrics, but the above data helps show that Alamo Group is likely undervalued currently. And when considering the strength of its earnings outlook, ALG sticks out as one of the market's strongest value stocks.
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Alamo Group, Inc. (ALG): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).