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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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 stock to keep an eye on is AES (AES - Free Report) . AES is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 8.55 right now. For comparison, its industry sports an average P/E of 13.62. Over the last 12 months, AES's Forward P/E has been as high as 12.31 and as low as 6.60, with a median of 9.10.
AES is also sporting a PEG ratio of 1.06. 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. AES's PEG compares to its industry's average PEG of 1.81. Within the past year, AES's PEG has been as high as 1.41 and as low as 0.72, with a median of 0.97.
Investors should also recognize that AES has a P/B ratio of 1.94. 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. This stock's P/B looks solid versus its industry's average P/B of 2.44. Over the past 12 months, AES's P/B has been as high as 3.84 and as low as 1.80, with a median of 2.26.
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. AES has a P/S ratio of 0.99. This compares to its industry's average P/S of 1.99.
Finally, investors should note that AES has a P/CF ratio of 7.17. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 11.54. Within the past 12 months, AES's P/CF has been as high as 26.42 and as low as 6.68, with a median of 8.93.
Another great Utility - Electric Power stock you could consider is TransAlta (TAC - Free Report) , which is a # 2 (Buy) stock with a Value Score of A.
Furthermore, TransAlta holds a P/B ratio of 2.90 and its industry's price-to-book ratio is 2.44. TAC's P/B has been as high as 4.80, as low as 1.77, with a median of 2.73 over the past 12 months.
These are just a handful of the figures considered in AES and TransAlta'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 AES and TAC is an impressive value stock right now.
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Is AES (AES) Stock Undervalued Right Now?
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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 stock to keep an eye on is AES (AES - Free Report) . AES is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 8.55 right now. For comparison, its industry sports an average P/E of 13.62. Over the last 12 months, AES's Forward P/E has been as high as 12.31 and as low as 6.60, with a median of 9.10.
AES is also sporting a PEG ratio of 1.06. 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. AES's PEG compares to its industry's average PEG of 1.81. Within the past year, AES's PEG has been as high as 1.41 and as low as 0.72, with a median of 0.97.
Investors should also recognize that AES has a P/B ratio of 1.94. 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. This stock's P/B looks solid versus its industry's average P/B of 2.44. Over the past 12 months, AES's P/B has been as high as 3.84 and as low as 1.80, with a median of 2.26.
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. AES has a P/S ratio of 0.99. This compares to its industry's average P/S of 1.99.
Finally, investors should note that AES has a P/CF ratio of 7.17. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 11.54. Within the past 12 months, AES's P/CF has been as high as 26.42 and as low as 6.68, with a median of 8.93.
Another great Utility - Electric Power stock you could consider is TransAlta (TAC - Free Report) , which is a # 2 (Buy) stock with a Value Score of A.
Furthermore, TransAlta holds a P/B ratio of 2.90 and its industry's price-to-book ratio is 2.44. TAC's P/B has been as high as 4.80, as low as 1.77, with a median of 2.73 over the past 12 months.
These are just a handful of the figures considered in AES and TransAlta'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 AES and TAC is an impressive value stock right now.