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Are Investors Undervaluing ABM Industries (ABM) 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.

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 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 ABM Industries (ABM - Free Report) . ABM is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 12.07 right now. For comparison, its industry sports an average P/E of 30.40. ABM's Forward P/E has been as high as 61.52 and as low as 10.01, with a median of 12.50, all within the past year.

Finally, investors will want to recognize that ABM has a P/CF ratio of 13.21. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. ABM's P/CF compares to its industry's average P/CF of 37.94. ABM's P/CF has been as high as 16.87 and as low as 7.26, with a median of 13.27, all within the past year.

These are only a few of the key metrics included in ABM Industries's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, ABM looks like an impressive value stock at the moment.


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