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Are Investors Undervaluing Fiat Chrysler (FCAU) Right Now?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company to watch right now is Fiat Chrysler . FCAU is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 5.78. This compares to its industry's average Forward P/E of 12.25. 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, all within the past year.

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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. FCAU has a P/S ratio of 0.35. This compares to its industry's average P/S of 0.44.

Finally, we should also recognize that FCAU has a P/CF ratio of 4.58. 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. FCAU's P/CF compares to its industry's average P/CF of 4.93. FCAU's P/CF has been as high as 4.61 and as low as 0.74, with a median of 1.80, all within the past year.

These are just a handful of the figures considered in Fiat Chrysler's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that FCAU is an impressive value stock right now.

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