Back to top

Image: Bigstock

Should Value Investors Buy American Equity Investment Life Holding (AEL) Stock?

Read MoreHide Full Article

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 American Equity Investment Life Holding (AEL - Free Report) . AEL is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 7.94. This compares to its industry's average Forward P/E of 8.12. Over the last 12 months, AEL's Forward P/E has been as high as 12.10 and as low as 6.36, with a median of 7.88.

Finally, investors should note that AEL has a P/CF ratio of 7.58. 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. AEL's current P/CF looks attractive when compared to its industry's average P/CF of 10.36. AEL's P/CF has been as high as 7.58 and as low as 1.26, with a median of 3.69, all within the past year.

These are only a few of the key metrics included in American Equity Investment Life Holding'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, AEL looks like an impressive value stock at the moment.

See More Zacks Research for These Tickers

Normally $25 each - click below to receive one report FREE:

American Equity Investment Life Holding Company (AEL) - free report >>

Published in