Back to top

Image: Bigstock

Are Investors Undervaluing Ameriprise Financial Services (AMP) Right Now?

Read MoreHide Full Article

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader 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.

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.

One company value investors might notice is Ameriprise Financial Services (AMP). AMP is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 9.61, which compares to its industry's average of 13.29. Over the last 12 months, AMP's Forward P/E has been as high as 10.41 and as low as 7.12, with a median of 8.73.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. AMP has a P/S ratio of 1.8. This compares to its industry's average P/S of 2.78.

Finally, investors will want to recognize that AMP has a P/CF ratio of 11.26. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 17.67. AMP's P/CF has been as high as 11.26 and as low as 7.72, with a median of 9.65, all within the past year.

Value investors will likely look at more than just these metrics, but the above data helps show that Ameriprise Financial Services is likely undervalued currently. And when considering the strength of its earnings outlook, AMP 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:

ISHARS-MO MC (JKG) - free report >>

Published in