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Are Investors Undervaluing Amerigo Resources (ARREF) Right Now?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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

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.

Amerigo Resources (ARREF - Free Report) is a stock many investors are watching right now. ARREF is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A.

Investors should also recognize that ARREF has a P/B ratio of 1.79. Investors use the P/B ratio to look at a stock's market value versus 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 3.39. Within the past 52 weeks, ARREF's P/B has been as high as 2.34 and as low as 1.27, with a median of 1.57.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. ARREF has a P/S ratio of 1.24. This compares to its industry's average P/S of 2.71.

Finally, we should also recognize that ARREF has a P/CF ratio of 8.24. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 19.97. Over the past 52 weeks, ARREF's P/CF has been as high as 11.74 and as low as 6.39, with a median of 8.64.

Value investors will likely look at more than just these metrics, but the above data helps show that Amerigo Resources is likely undervalued currently. And when considering the strength of its earnings outlook, ARREF sticks out at as one of the market's strongest value stocks.

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