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Is American Equity Investment (AEL) Stock Undervalued Right Now?

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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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

American Equity Investment (AEL - Free Report) is a stock many investors are watching right now. AEL is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock holds a P/E ratio of 7.04, while its industry has an average P/E of 9.45. Over the last 12 months, AEL's Forward P/E has been as high as 8.64 and as low as 5.14, with a median of 7.03.

Investors should also recognize that AEL has a P/B ratio of 0.64. 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 stock's P/B looks solid versus its industry's average P/B of 1.79. AEL's P/B has been as high as 1.24 and as low as 0.48, with a median of 0.69, over the past year.

These are only a few of the key metrics included in American Equity Investment's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, AEL looks like an impressive value stock at the moment.


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