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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 company value investors might notice is Ameriprise Financial Services (NYSE:AMP). AMP is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 7.26. This compares to its industry's average Forward P/E of 10.71. Over the last 12 months, AMP's Forward P/E has been as high as 9.50 and as low as 5.89, with a median of 8.31.
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 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 1.28. This compares to its industry's average P/S of 2.4.
Finally, we should also recognize that AMP has a P/CF ratio of 8.19. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. AMP's current P/CF looks attractive when compared to its industry's average P/CF of 12.38. Within the past 12 months, AMP's P/CF has been as high as 11.44 and as low as 6.51, with a median of 9.53.
These are just a handful of the figures considered in Ameriprise Financial Services'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 AMP is an impressive value stock right now.
Ameriprise Financial, Inc. (AMP): Free Stock Analysis Report
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Zacks Investment Research