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

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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 American Equity Investment (AEL - Free Report) . AEL is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 8.43. This compares to its industry's average Forward P/E of 9.22. Over the past 52 weeks, AEL's Forward P/E has been as high as 11.61 and as low as 8.09, with a median of 9.98.

Investors should also recognize that AEL has a P/B ratio of 1.16. The P/B ratio is used to compare a stock's market value with 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 1.69. Over the past year, AEL's P/B has been as high as 1.39 and as low as 0.92, with a median of 1.07.

These are just a handful of the figures considered in American Equity Investment's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that AEL is an impressive value stock right now.




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