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Should Value Investors Buy Ally Financial (ALLY) Stock?
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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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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 company value investors might notice is Ally Financial (ALLY - Free Report) . ALLY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 7.80. This compares to its industry's average Forward P/E of 7.85. Over the last 12 months, ALLY's Forward P/E has been as high as 8.68 and as low as 5.80, with a median of 7.70.
Investors should also note that ALLY holds a PEG ratio of 0.56. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ALLY's industry has an average PEG of 0.74 right now. ALLY's PEG has been as high as 0.68 and as low as 0.45, with a median of 0.58, all within the past year.
Investors should also recognize that ALLY has a P/B ratio of 0.87. 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. ALLY's current P/B looks attractive when compared to its industry's average P/B of 0.93. Over the past 12 months, ALLY's P/B has been as high as 0.90 and as low as 0.65, with a median of 0.85.
Finally, we should also recognize that ALLY has a P/CF ratio of 4.07. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. ALLY's current P/CF looks attractive when compared to its industry's average P/CF of 4.79. ALLY's P/CF has been as high as 4.33 and as low as 3.08, with a median of 3.95, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Ally Financial is likely undervalued currently. And when considering the strength of its earnings outlook, ALLY sticks out at as one of the market's strongest value stocks.
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Should Value Investors Buy Ally Financial (ALLY) 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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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 company value investors might notice is Ally Financial (ALLY - Free Report) . ALLY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 7.80. This compares to its industry's average Forward P/E of 7.85. Over the last 12 months, ALLY's Forward P/E has been as high as 8.68 and as low as 5.80, with a median of 7.70.
Investors should also note that ALLY holds a PEG ratio of 0.56. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ALLY's industry has an average PEG of 0.74 right now. ALLY's PEG has been as high as 0.68 and as low as 0.45, with a median of 0.58, all within the past year.
Investors should also recognize that ALLY has a P/B ratio of 0.87. 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. ALLY's current P/B looks attractive when compared to its industry's average P/B of 0.93. Over the past 12 months, ALLY's P/B has been as high as 0.90 and as low as 0.65, with a median of 0.85.
Finally, we should also recognize that ALLY has a P/CF ratio of 4.07. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. ALLY's current P/CF looks attractive when compared to its industry's average P/CF of 4.79. ALLY's P/CF has been as high as 4.33 and as low as 3.08, with a median of 3.95, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Ally Financial is likely undervalued currently. And when considering the strength of its earnings outlook, ALLY sticks out at as one of the market's strongest value stocks.