Many investors like to look for value in stocks, but this can be very tough to define. There is great debate regarding which metrics are the best to focus on in this regard, and which are not really quality indicators of future performance. Fortunately, with our new style score systemwe have identified the key statistics to pay close attention to and thus which stocks might be the best for value investors in the near term.
This method discovered several great candidates for value-oriented investors, but today let’s focus on Fifth Street Asset Management Inc. as this stock is looking especially impressive right now. And while there are numerous reasons why this is the case, we have highlighted three of the most vital reasons for FSAM’s status as a solid value stock below:
Forward PE for Fifth Street Asset Management
Easily one of the most popular readings for value investors, the forward PE ratio shows us the current price of a stock divided by the full year earnings. Generally speaking, value investors like to see this ratio below 20, though it can vary by industry.
Right now, FSAM has a forward PE of just 9.84, which means that investors are paying $9.84 for each dollar in expected Fifth Street Asset Management earnings this year. Compared to the industry at large this is pretty favorable as the overall space has an average PE of 12.51 in comparison.
Price to Forward Sales for Fifth Street Asset Management
One of the most underrated ratios for value investors is the price/forward sales metric. This ratio shows investors how much they are paying for each dollar of revenues generated. In other words, a lower number is better here while a price to sales ratio of 1 means that you are paying one dollar for each dollar in sales.
FIFTH STREET AM PE Ratio (TTM)
With a P/S ratio of 0.43, FSAM investors are paying 43 cents in stock price for each dollar of revenue generated by the company. Compare this to the industry average of 2.71, and it is safe to say that FSAM is undervalued compared to many of its peers on this important metric.
FSAM Earnings Estimate Revisions Moving in the Right Direction
The solid value ratios outlined in the preceding paragraphs might be enough for some investors, but we should also note that the earnings estimate revisions have been trending in a positive direction as well. Analysts who follow FSAM stock have been raising their estimates for the company lately, meaning that the EPS picture is looking a bit more favorably for Fifth Street Asset Management now.
Over the past 30 days, 1 earnings estimates have gone higher compared to none lower for the full year, while we are also seeing that 1 estimate has move upwards with no downward revision for the next year time frame too. These revisions have helped to boost the consensus estimate as 30days ago FSAM was expected to post earnings of 49 cents per share for the full year though today it looks to have EPS of 63 cents for the full year.
Bottom Line
For the reasons detailed above, investors shouldn’t be surprised to read that we have FSAM as a stock with a Value Score of ‘A’ and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
So if you are a value investor, definitely keep FSAM on your short list as this looks to be a stock that is very well-positioned for gains in the near term.
Confidential from Zacks
Beyond this Tale of the Tape, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
Image: Bigstock
Fifth Street Asset Management: 3 Reasons Why FSAM Is a Top Choice for Value Investors
Many investors like to look for value in stocks, but this can be very tough to define. There is great debate regarding which metrics are the best to focus on in this regard, and which are not really quality indicators of future performance. Fortunately, with our new style score systemwe have identified the key statistics to pay close attention to and thus which stocks might be the best for value investors in the near term.
This method discovered several great candidates for value-oriented investors, but today let’s focus on Fifth Street Asset Management Inc. as this stock is looking especially impressive right now. And while there are numerous reasons why this is the case, we have highlighted three of the most vital reasons for FSAM’s status as a solid value stock below:
Forward PE for Fifth Street Asset Management
Easily one of the most popular readings for value investors, the forward PE ratio shows us the current price of a stock divided by the full year earnings. Generally speaking, value investors like to see this ratio below 20, though it can vary by industry.
Right now, FSAM has a forward PE of just 9.84, which means that investors are paying $9.84 for each dollar in expected Fifth Street Asset Management earnings this year. Compared to the industry at large this is pretty favorable as the overall space has an average PE of 12.51 in comparison.
Price to Forward Sales for Fifth Street Asset Management
One of the most underrated ratios for value investors is the price/forward sales metric. This ratio shows investors how much they are paying for each dollar of revenues generated. In other words, a lower number is better here while a price to sales ratio of 1 means that you are paying one dollar for each dollar in sales.
FIFTH STREET AM PE Ratio (TTM)
FIFTH STREET AM PE Ratio (TTM) | FIFTH STREET AM Quote
With a P/S ratio of 0.43, FSAM investors are paying 43 cents in stock price for each dollar of revenue generated by the company. Compare this to the industry average of 2.71, and it is safe to say that FSAM is undervalued compared to many of its peers on this important metric.
FSAM Earnings Estimate Revisions Moving in the Right Direction
The solid value ratios outlined in the preceding paragraphs might be enough for some investors, but we should also note that the earnings estimate revisions have been trending in a positive direction as well. Analysts who follow FSAM stock have been raising their estimates for the company lately, meaning that the EPS picture is looking a bit more favorably for Fifth Street Asset Management now.
Over the past 30 days, 1 earnings estimates have gone higher compared to none lower for the full year, while we are also seeing that 1 estimate has move upwards with no downward revision for the next year time frame too. These revisions have helped to boost the consensus estimate as 30days ago FSAM was expected to post earnings of 49 cents per share for the full year though today it looks to have EPS of 63 cents for the full year.
Bottom Line
For the reasons detailed above, investors shouldn’t be surprised to read that we have FSAM as a stock with a Value Score of ‘A’ and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
So if you are a value investor, definitely keep FSAM on your short list as this looks to be a stock that is very well-positioned for gains in the near term.
Confidential from Zacks
Beyond this Tale of the Tape, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>