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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 Aaron's (AAN - Free Report) . AAN is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.
Investors should also note that AAN holds a PEG ratio of 0.91. 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. AAN's industry currently sports an average PEG of 0.95. Within the past year, AAN's PEG has been as high as 1.02 and as low as 0.75, with a median of 0.91.
Another notable valuation metric for AAN is its P/B ratio of 2.05. 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 3.43. Within the past 52 weeks, AAN's P/B has been as high as 2.21 and as low as 1.54, with a median of 1.93.
Finally, our model also underscores that AAN has a P/CF ratio of 1.79. 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. AAN's current P/CF looks attractive when compared to its industry's average P/CF of 5.86. AAN's P/CF has been as high as 1.99 and as low as 1.34, with a median of 1.71, all within the past year.
These are just a handful of the figures considered in Aaron's'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 AAN is an impressive value stock right now.