Back to top

Is Arconic (ARNC) Stock Undervalued Right Now?

Read MoreHide Full Article

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 to watch right now is Arconic (ARNC - Free Report) . ARNC is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock holds a P/E ratio of 12.02, while its industry has an average P/E of 15.72. Over the past 52 weeks, ARNC's Forward P/E has been as high as 15.36 and as low as 10.10, with a median of 12.45.

We also note that ARNC holds a PEG ratio of 0.65. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ARNC's PEG compares to its industry's average PEG of 1.06. Within the past year, ARNC's PEG has been as high as 0.77 and as low as 0.62, with a median of 0.72.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. ARNC has a P/S ratio of 0.75. This compares to its industry's average P/S of 1.32.

These are only a few of the key metrics included in Arconic's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, ARNC looks like an impressive value stock at the moment.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Arconic Inc. (ARNC) - free report >>

Published in