Back to top

Image: Bigstock

Is Aecom Technology (ACM) a Great Value Stock Right Now?

Read MoreHide Full Article

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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One stock to keep an eye on is Aecom Technology (ACM - Free Report) . ACM is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 13.47 right now. For comparison, its industry sports an average P/E of 16.61. Over the last 12 months, ACM's Forward P/E has been as high as 13.47 and as low as 9.92, with a median of 11.26.

We also note that ACM holds a PEG ratio of 1.09. 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. ACM's industry has an average PEG of 1.24 right now. ACM's PEG has been as high as 3.39 and as low as 1.01, with a median of 1.23, all within the past year.

Another valuation metric that we should highlight is ACM's P/B ratio of 1.86. 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. ACM's current P/B looks attractive when compared to its industry's average P/B of 1.89. Within the past 52 weeks, ACM's P/B has been as high as 1.86 and as low as 1.06, with a median of 1.21.

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. ACM has a P/S ratio of 0.37. This compares to its industry's average P/S of 0.65.

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


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


AECOM (ACM) - free report >>

Published in