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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
Ally Financial (ALLY - Free Report) is a stock many investors are watching right now. ALLY is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 8.20 right now. For comparison, its industry sports an average P/E of 8.27. Over the past 52 weeks, ALLY's Forward P/E has been as high as 8.73 and as low as 6.53, with a median of 7.65.
Investors will also notice that ALLY has a PEG ratio of 0.66. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ALLY's PEG compares to its industry's average PEG of 0.72. ALLY's PEG has been as high as 0.66 and as low as 0.45, with a median of 0.58, all within the past year.
Another valuation metric that we should highlight is ALLY's P/B ratio of 0.83. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. ALLY's current P/B looks attractive when compared to its industry's average P/B of 0.90. ALLY's P/B has been as high as 0.96 and as low as 0.71, with a median of 0.85, over the past year.
Finally, investors should note that ALLY has a P/CF ratio of 3.85. 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. ALLY's current P/CF looks attractive when compared to its industry's average P/CF of 5.05. ALLY's P/CF has been as high as 4.44 and as low as 3.23, with a median of 3.94, all within the past year.
These are just a handful of the figures considered in Ally Financial'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 ALLY is an impressive value stock right now.