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Should Value Investors Buy Fiat Chrysler (FCAU) Stock?

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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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 Fiat Chrysler . FCAU is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 6.19 right now. For comparison, its industry sports an average P/E of 12.46. Over the past year, FCAU's Forward P/E has been as high as 13,013.31 and as low as -2,085.57, with a median of 6.68.

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. FCAU has a P/S ratio of 0.32. This compares to its industry's average P/S of 0.43.

Finally, we should also recognize that FCAU has a P/CF ratio of 4.22. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 4.93. Over the past year, FCAU's P/CF has been as high as 4.61 and as low as 0.74, with a median of 1.76.

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

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