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Are Investors Undervaluing Associated Banc-Corp (ASB) Right Now?

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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.

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.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company to watch right now is Associated Banc-Corp (ASB - Free Report) . ASB is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 11.66. This compares to its industry's average Forward P/E of 12.09. Over the past year, ASB's Forward P/E has been as high as 17.92 and as low as 6.28, with a median of 12.30.

We also note that ASB holds a PEG ratio of 1.46. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ASB's PEG compares to its industry's average PEG of 2.08. Within the past year, ASB's PEG has been as high as 2.24 and as low as 0.78, with a median of 1.54.

We should also highlight that ASB has a P/B ratio of 0.56. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. ASB's current P/B looks attractive when compared to its industry's average P/B of 1.41. Within the past 52 weeks, ASB's P/B has been as high as 0.98 and as low as 0.47, with a median of 0.60.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. ASB has a P/S ratio of 1.6. This compares to its industry's average P/S of 2.16.

Finally, we should also recognize that ASB has a P/CF ratio of 4.65. 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 stock's P/CF looks attractive against its industry's average P/CF of 13.36. Over the past year, ASB's P/CF has been as high as 7.86 and as low as 3.80, with a median of 4.97.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Associated Banc-Corp is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ASB feels like a great value stock at the moment.


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