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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 company to watch right now 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 a P/E ratio of 5.82, which compares to its industry's average of 14.36. AES's Forward P/E has been as high as 11.02 and as low as 4.89, with a median of 8.44, all within the past year.
AES is also sporting a PEG ratio of 1.75. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. AES's PEG compares to its industry's average PEG of 1.79. Over the last 12 months, AES's PEG has been as high as 1.89 and as low as 0.55, with a median of 0.76.
Another notable valuation metric for AES is its P/B ratio of 1.15. Investors use the P/B ratio to look at a stock's market value versus 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 2.24. AES's P/B has been as high as 2.46 and as low as 0.92, with a median of 1.69, over the past year.
Finally, our model also underscores that AES has a P/CF ratio of 3.01. 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. AES's current P/CF looks attractive when compared to its industry's average P/CF of 10.48. Within the past 12 months, AES's P/CF has been as high as 9.13 and as low as 2.41, with a median of 6.03.
These are only a few of the key metrics included in AES's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, AES looks like an impressive value stock at the moment.
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Are Investors Undervaluing AES (AES) Right Now?
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 company to watch right now 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 a P/E ratio of 5.82, which compares to its industry's average of 14.36. AES's Forward P/E has been as high as 11.02 and as low as 4.89, with a median of 8.44, all within the past year.
AES is also sporting a PEG ratio of 1.75. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. AES's PEG compares to its industry's average PEG of 1.79. Over the last 12 months, AES's PEG has been as high as 1.89 and as low as 0.55, with a median of 0.76.
Another notable valuation metric for AES is its P/B ratio of 1.15. Investors use the P/B ratio to look at a stock's market value versus 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 2.24. AES's P/B has been as high as 2.46 and as low as 0.92, with a median of 1.69, over the past year.
Finally, our model also underscores that AES has a P/CF ratio of 3.01. 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. AES's current P/CF looks attractive when compared to its industry's average P/CF of 10.48. Within the past 12 months, AES's P/CF has been as high as 9.13 and as low as 2.41, with a median of 6.03.
These are only a few of the key metrics included in AES's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, AES looks like an impressive value stock at the moment.