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Are Investors Undervaluing Amalgamated Financial (AMAL) 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.

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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 stock to keep an eye on is Amalgamated Financial (AMAL - Free Report) . AMAL is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 5.54 right now. For comparison, its industry sports an average P/E of 7.22. Over the past 52 weeks, AMAL's Forward P/E has been as high as 9.02 and as low as 4.96, with a median of 6.28.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. AMAL has a P/S ratio of 1.4. This compares to its industry's average P/S of 3.32.

Finally, investors will want to recognize that AMAL has a P/CF ratio of 5.03. 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. AMAL's P/CF compares to its industry's average P/CF of 10.41. Over the past year, AMAL's P/CF has been as high as 9.96 and as low as 4.45, with a median of 6.03.

Value investors will likely look at more than just these metrics, but the above data helps show that Amalgamated Financial is likely undervalued currently. And when considering the strength of its earnings outlook, AMAL sticks out at as one of the market's strongest value stocks.


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