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American Equity Investment Life Holding Company (AEL) - free report >>
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American Equity Investment Life Holding Company (AEL) - free report >>
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Are Investors Undervaluing American Equity Investment (AEL) Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company to watch right now is American Equity Investment (AEL - Free Report) . AEL is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with P/E ratio of 6.98 right now. For comparison, its industry sports an average P/E of 8.42. Over the last 12 months, AEL's Forward P/E has been as high as 8.93 and as low as 5.14, with a median of 7.02.
Another notable valuation metric for AEL is its P/B ratio of 0.65. 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 attractive against its industry's average P/B of 1.71. AEL's P/B has been as high as 1.24 and as low as 0.48, with a median of 0.86, over the past year.
These are just a handful of the figures considered in American Equity Investment'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 AEL is an impressive value stock right now.