We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 AES (AES - Free Report) . AES 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 8.10. This compares to its industry's average Forward P/E of 15.62. Over the past 52 weeks, AES's Forward P/E has been as high as 11.23 and as low as 6.60, with a median of 8.80.
Investors will also notice that AES has a PEG ratio of 1.06. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. AES's PEG compares to its industry's average PEG of 2.11. Within the past year, AES's PEG has been as high as 1.39 and as low as 0.72, with a median of 0.95.
Investors should also recognize that AES has a P/B ratio of 1.66. 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 2.48. Over the past year, AES's P/B has been as high as 2.98 and as low as 1.64, with a median of 2.15.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. AES has a P/S ratio of 1.02. This compares to its industry's average P/S of 2.07.
Finally, our model also underscores that AES has a P/CF ratio of 6.01. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. AES's current P/CF looks attractive when compared to its industry's average P/CF of 12.46. Over the past year, AES's P/CF has been as high as 26.42 and as low as 5.91, with a median of 8.21.
These figures are just a handful of the metrics value investors tend to look at, but they help show that AES is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AES feels like a great value stock at the moment.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is AES (AES) Stock Undervalued 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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 AES (AES - Free Report) . AES 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 8.10. This compares to its industry's average Forward P/E of 15.62. Over the past 52 weeks, AES's Forward P/E has been as high as 11.23 and as low as 6.60, with a median of 8.80.
Investors will also notice that AES has a PEG ratio of 1.06. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. AES's PEG compares to its industry's average PEG of 2.11. Within the past year, AES's PEG has been as high as 1.39 and as low as 0.72, with a median of 0.95.
Investors should also recognize that AES has a P/B ratio of 1.66. 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 2.48. Over the past year, AES's P/B has been as high as 2.98 and as low as 1.64, with a median of 2.15.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. AES has a P/S ratio of 1.02. This compares to its industry's average P/S of 2.07.
Finally, our model also underscores that AES has a P/CF ratio of 6.01. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. AES's current P/CF looks attractive when compared to its industry's average P/CF of 12.46. Over the past year, AES's P/CF has been as high as 26.42 and as low as 5.91, with a median of 8.21.
These figures are just a handful of the metrics value investors tend to look at, but they help show that AES is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AES feels like a great value stock at the moment.