Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 company to watch right now is Ameriprise Financial Services (AMP - Free Report) . AMP is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 7.78. This compares to its industry's average Forward P/E of 10.78. Over the past 52 weeks, AMP's Forward P/E has been as high as 14.14 and as low as 7.47, with a median of 9.70.
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. AMP has a P/S ratio of 1.44. This compares to its industry's average P/S of 2.6.
Finally, our model also underscores that AMP has a P/CF ratio of 9.51. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 13.40. Within the past 12 months, AMP's P/CF has been as high as 16.33 and as low as 9.12, with a median of 11.51.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Ameriprise Financial Services is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AMP feels like a great value stock at the moment.