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Is Agco (AGCO) a Great Value Stock Right Now?

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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.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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.

Agco (AGCO - Free Report) is a stock many investors are watching right now. AGCO is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.

We also note that AGCO holds a PEG ratio of 1.07. 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. AGCO's industry has an average PEG of 1.53 right now. AGCO's PEG has been as high as 1.15 and as low as 0.70, with a median of 0.90, all within the past year.

Investors should also recognize that AGCO has a P/B ratio of 1.89. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 2.86. Over the past year, AGCO's P/B has been as high as 2.04 and as low as 1.33, with a median of 1.67.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. AGCO has a P/S ratio of 0.58. This compares to its industry's average P/S of 0.91.

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


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