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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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One stock to keep an eye on is AECOM (ACM - Free Report) . ACM is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 23.08, which compares to its industry's average of 26.76. ACM's Forward P/E has been as high as 23.18 and as low as 16.19, with a median of 20.43, all within the past year.
Investors will also notice that ACM has a PEG ratio of 1.79. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ACM's PEG compares to its industry's average PEG of 1.83. Over the past 52 weeks, ACM's PEG has been as high as 1.96 and as low as 1.38, with a median of 1.67.
Another notable valuation metric for ACM is its P/B ratio of 6.49. 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. This stock's P/B looks attractive against its industry's average P/B of 8.09. Over the past year, ACM's P/B has been as high as 6.62 and as low as 4.69, with a median of 5.88.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. ACM has a P/S ratio of 0.57. This compares to its industry's average P/S of 1.54.
Finally, investors should note that ACM has a P/CF ratio of 22.39. 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. ACM's current P/CF looks attractive when compared to its industry's average P/CF of 31.23. Over the past year, ACM's P/CF has been as high as 32.56 and as low as 14.65, with a median of 20.56.
These figures are just a handful of the metrics value investors tend to look at, but they help show that AECOM is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ACM feels like a great value stock at the moment.
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Are Investors Undervaluing AECOM (ACM) Right Now?
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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One stock to keep an eye on is AECOM (ACM - Free Report) . ACM is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 23.08, which compares to its industry's average of 26.76. ACM's Forward P/E has been as high as 23.18 and as low as 16.19, with a median of 20.43, all within the past year.
Investors will also notice that ACM has a PEG ratio of 1.79. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ACM's PEG compares to its industry's average PEG of 1.83. Over the past 52 weeks, ACM's PEG has been as high as 1.96 and as low as 1.38, with a median of 1.67.
Another notable valuation metric for ACM is its P/B ratio of 6.49. 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. This stock's P/B looks attractive against its industry's average P/B of 8.09. Over the past year, ACM's P/B has been as high as 6.62 and as low as 4.69, with a median of 5.88.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. ACM has a P/S ratio of 0.57. This compares to its industry's average P/S of 1.54.
Finally, investors should note that ACM has a P/CF ratio of 22.39. 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. ACM's current P/CF looks attractive when compared to its industry's average P/CF of 31.23. Over the past year, ACM's P/CF has been as high as 32.56 and as low as 14.65, with a median of 20.56.
These figures are just a handful of the metrics value investors tend to look at, but they help show that AECOM is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ACM feels like a great value stock at the moment.