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Are Investors Undervaluing Volkswagen AG (VWAGY) Right Now?
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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is Volkswagen AG (VWAGY - Free Report) . VWAGY is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 8.21 right now. For comparison, its industry sports an average P/E of 17.57. Over the past year, VWAGY's Forward P/E has been as high as 12.25 and as low as 3.53, with a median of 8.33.
We also note that VWAGY holds a PEG ratio of 0.81. 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. VWAGY's PEG compares to its industry's average PEG of 1.13. Over the past 52 weeks, VWAGY's PEG has been as high as 1.15 and as low as 0.69, with a median of 0.87.
Another valuation metric that we should highlight is VWAGY's P/B ratio of 0.81. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. VWAGY's current P/B looks attractive when compared to its industry's average P/B of 0.84. Within the past 52 weeks, VWAGY's P/B has been as high as 0.83 and as low as 0.39, with a median of 0.62.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. VWAGY has a P/S ratio of 0.47. This compares to its industry's average P/S of 0.48.
Finally, our model also underscores that VWAGY has a P/CF ratio of 3.34. 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. VWAGY's P/CF compares to its industry's average P/CF of 4.93. Over the past 52 weeks, VWAGY's P/CF has been as high as 3.45 and as low as 1.27, with a median of 2.50.
These are just a handful of the figures considered in Volkswagen AG'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 VWAGY is an impressive value stock right now.
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Are Investors Undervaluing Volkswagen AG (VWAGY) Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is Volkswagen AG (VWAGY - Free Report) . VWAGY is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 8.21 right now. For comparison, its industry sports an average P/E of 17.57. Over the past year, VWAGY's Forward P/E has been as high as 12.25 and as low as 3.53, with a median of 8.33.
We also note that VWAGY holds a PEG ratio of 0.81. 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. VWAGY's PEG compares to its industry's average PEG of 1.13. Over the past 52 weeks, VWAGY's PEG has been as high as 1.15 and as low as 0.69, with a median of 0.87.
Another valuation metric that we should highlight is VWAGY's P/B ratio of 0.81. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. VWAGY's current P/B looks attractive when compared to its industry's average P/B of 0.84. Within the past 52 weeks, VWAGY's P/B has been as high as 0.83 and as low as 0.39, with a median of 0.62.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. VWAGY has a P/S ratio of 0.47. This compares to its industry's average P/S of 0.48.
Finally, our model also underscores that VWAGY has a P/CF ratio of 3.34. 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. VWAGY's P/CF compares to its industry's average P/CF of 4.93. Over the past 52 weeks, VWAGY's P/CF has been as high as 3.45 and as low as 1.27, with a median of 2.50.
These are just a handful of the figures considered in Volkswagen AG'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 VWAGY is an impressive value stock right now.