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Is Atlas Financial (AFH) a Great Value Stock Right Now?

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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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

Atlas Financial (AFH - Free Report) is a stock many investors are watching right now. AFH is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

Another valuation metric that we should highlight is AFH's P/B ratio of 1.38. The P/B ratio pits a stock's market value against 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 1.52. Over the past year, AFH's P/B has been as high as 2.83 and as low as 1, with a median of 1.40.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. AFH has a P/S ratio of 0.55. This compares to its industry's average P/S of 1.17.

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




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