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Are Investors Undervaluing American Public Education (APEI) 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.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company to watch right now is American Public Education (APEI - Free Report) . APEI is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

Investors should also recognize that APEI has a P/B ratio of 0.70. 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. This stock's P/B looks solid versus its industry's average P/B of 1.86. APEI's P/B has been as high as 1.21 and as low as 0.49, with a median of 0.92, over the past year.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. APEI has a P/S ratio of 0.4. This compares to its industry's average P/S of 1.18.

If you're looking for another solid Schools value stock, take a look at Stride (LRN - Free Report) . LRN is a # 2 (Buy) stock with a Value score of A.

Stride is trading at a forward earnings multiple of 17.39 at the moment, with a PEG ratio of 0.87. This compares to its industry's average P/E of 22.03 and average PEG ratio of 1.26.

Over the past year, LRN's P/E has been as high as 19.23, as low as 12.26, with a median of 14.64; its PEG ratio has been as high as 0.96, as low as 0.61, with a median of 0.92 during the same time period.

Furthermore, Stride holds a P/B ratio of 2.44 and its industry's price-to-book ratio is 1.86. LRN's P/B has been as high as 2.45, as low as 1.57, with a median of 2.03 over the past 12 months.

These are only a few of the key metrics included in American Public Education and Stride strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, APEI and LRN look like an impressive value stock at the moment.


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