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Are Investors Undervaluing Ally Financial (ALLY) Right Now?
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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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.
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 stock to keep an eye on is Ally Financial (ALLY - Free Report) . ALLY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 7.18. This compares to its industry's average Forward P/E of 8.27. ALLY's Forward P/E has been as high as 8.73 and as low as 6.98, with a median of 7.65, all within the past year.
ALLY is also sporting a PEG ratio of 0.57. 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. Over the past 52 weeks, ALLY's PEG has been as high as 0.66 and as low as 0.45, with a median of 0.58.
Another notable valuation metric for ALLY is its P/B ratio of 0.80. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 0.90. Over the past 12 months, ALLY's P/B has been as high as 0.96 and as low as 0.78, with a median of 0.85.
Finally, investors should note that ALLY has a P/CF ratio of 3.82. 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. Over the past 52 weeks, ALLY's P/CF has been as high as 4.44 and as low as 3.60, with a median of 3.94.
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.
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Are Investors Undervaluing Ally Financial (ALLY) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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.
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 stock to keep an eye on is Ally Financial (ALLY - Free Report) . ALLY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 7.18. This compares to its industry's average Forward P/E of 8.27. ALLY's Forward P/E has been as high as 8.73 and as low as 6.98, with a median of 7.65, all within the past year.
ALLY is also sporting a PEG ratio of 0.57. 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. Over the past 52 weeks, ALLY's PEG has been as high as 0.66 and as low as 0.45, with a median of 0.58.
Another notable valuation metric for ALLY is its P/B ratio of 0.80. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 0.90. Over the past 12 months, ALLY's P/B has been as high as 0.96 and as low as 0.78, with a median of 0.85.
Finally, investors should note that ALLY has a P/CF ratio of 3.82. 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. Over the past 52 weeks, ALLY's P/CF has been as high as 4.44 and as low as 3.60, with a median of 3.94.
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.