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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 Ameriprise Financial Services (AMP - Free Report) . AMP is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 7.87, while its industry has an average P/E of 10.90. Over the past 52 weeks, AMP's Forward P/E has been as high as 9.50 and as low as 5.89, with a median of 8.52.
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. AMP has a P/S ratio of 1.28. This compares to its industry's average P/S of 2.66.
Finally, our model also underscores that AMP has a P/CF ratio of 8.80. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. AMP's current P/CF looks attractive when compared to its industry's average P/CF of 13.49. AMP's P/CF has been as high as 11.44 and as low as 6.51, with a median of 9.60, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Ameriprise Financial Services is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AMP feels like a great value stock at the moment.