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Affiliated Managers Group, Inc. (AMG) - free report >>
Artisan Partners Asset Management Inc. (APAM) - free report >>
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Affiliated Managers Group, Inc. (AMG) - free report >>
Artisan Partners Asset Management Inc. (APAM) - free report >>
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AMG vs. APAM: Which Stock Should Value Investors Buy Now?
Investors with an interest in Financial - Investment Management stocks have likely encountered both Affiliated Managers Group (AMG - Free Report) and Artisan Partners Asset Management (APAM - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Affiliated Managers Group is sporting a Zacks Rank of #2 (Buy), while Artisan Partners Asset Management has a Zacks Rank of #3 (Hold). This means that AMG's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
AMG currently has a forward P/E ratio of 8.01, while APAM has a forward P/E of 15.59. We also note that AMG has a PEG ratio of 0.67. 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. APAM currently has a PEG ratio of 0.81.
Another notable valuation metric for AMG is its P/B ratio of 1.38. 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. For comparison, APAM has a P/B of 25.39.
Based on these metrics and many more, AMG holds a Value grade of A, while APAM has a Value grade of C.
AMG has seen stronger estimate revision activity and sports more attractive valuation metrics than APAM, so it seems like value investors will conclude that AMG is the superior option right now.