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Are Investors Undervaluing Allison Transmission Holdings (ALSN) 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.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is Allison Transmission Holdings (ALSN - Free Report) . ALSN is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 7.55, which compares to its industry's average of 21.86. Over the last 12 months, ALSN's Forward P/E has been as high as 9.72 and as low as 5.75, with a median of 7.08.
Investors should also note that ALSN holds a PEG ratio of 1.08. 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. ALSN's PEG compares to its industry's average PEG of 1.18. Over the past 52 weeks, ALSN's PEG has been as high as 1.39 and as low as 0.82, with a median of 1.01.
These are just a handful of the figures considered in Allison Transmission Holdings'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 ALSN is an impressive value stock right now.