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Should Value Investors Buy Associated BancCorp (ASB) Stock?

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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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 value investors might notice is Associated BancCorp (ASB - Free Report) . ASB is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.

Another valuation metric that we should highlight is ASB's P/B ratio of 0.97. 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. ASB's current P/B looks attractive when compared to its industry's average P/B of 2.34. Within the past 52 weeks, ASB's P/B has been as high as 1.01 and as low as 0.70, with a median of 0.86.

Finally, investors should note that ASB has a P/CF ratio of 8.25. 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. ASB's P/CF compares to its industry's average P/CF of 16.23. Within the past 12 months, ASB's P/CF has been as high as 8.54 and as low as 6.05, with a median of 7.24.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Associated BancCorp is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ASB feels like a great value stock at the moment.


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