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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company value investors might notice is Ameriprise Financial Services (AMP - Free Report) . AMP is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 9.21 right now. For comparison, its industry sports an average P/E of 13.35. Over the past year, AMP's Forward P/E has been as high as 10.41 and as low as 7.12, with a median of 8.66.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. AMP has a P/S ratio of 1.65. This compares to its industry's average P/S of 2.51.
Finally, investors will want to recognize that AMP has a P/CF ratio of 10.50. 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. AMP's P/CF compares to its industry's average P/CF of 17.67. Over the past year, AMP's P/CF has been as high as 10.80 and as low as 7.41, with a median of 9.62.
These are only a few of the key metrics included in Ameriprise Financial Services'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, AMP looks like an impressive value stock at the moment.