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.
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 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.
Artisan Partners Asset Management (APAM - Free Report) is a stock many investors are watching right now. APAM is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 11.50 right now. For comparison, its industry sports an average P/E of 13.44. APAM's Forward P/E has been as high as 12.34 and as low as 7.22, with a median of 10.27, all within the past year.
Investors will also notice that APAM has a PEG ratio of 1.05. 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. APAM's industry currently sports an average PEG of 1.38. Within the past year, APAM's PEG has been as high as 1.66 and as low as 0.82, with a median of 1.40.
Finally, investors should note that APAM has a P/CF ratio of 11.13. 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. APAM's current P/CF looks attractive when compared to its industry's average P/CF of 17.67. Within the past 12 months, APAM's P/CF has been as high as 12.74 and as low as 7.18, with a median of 10.22.
Value investors will likely look at more than just these metrics, but the above data helps show that Artisan Partners Asset Management is likely undervalued currently. And when considering the strength of its earnings outlook, APAM sticks out at as one of the market's strongest value stocks.