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.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the “Value” category. Stocks with high Zacks Ranks and “A” grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is Aecom Technology (ACM). ACM is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 12.64, which compares to its industry’s average of 13.68. Over the past 52 weeks, ACM’s Forward P/E has been as high as 13.23 and as low as 8.85, with a median of 10.92.
Investors will also notice that ACM has a PEG ratio of 1.02. 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. ACM’s industry currently sports an average PEG of 1.11. Over the last 12 months, ACM’s PEG has been as high as 3.39 and as low as 1.02, with a median of 1.28.
We should also highlight that ACM has a P/B ratio of 1.73. The P/B is a method of comparing a stock’s market value to its book value, which is defined as total assets minus total liabilities. ACM’s current P/B looks attractive when compared to its industry’s average P/B of 1.81. Over the past year, ACM’s P/B has been as high as 1.77 and as low as 0.94, with a median of 1.18.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock’s price with the company’s revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. ACM has a P/S ratio of 0.33. This compares to its industry’s average P/S of 0.67.
These are just a handful of the figures considered in Aecom Technology’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 ACM is an impressive value stock right now.
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