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Should Value Investors Buy AB Volvo (VLVLY) Stock?

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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.

AB Volvo (VLVLY - Free Report) is a stock many investors are watching right now. VLVLY is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock holds a P/E ratio of 9.50, while its industry has an average P/E of 9.98. Over the past 52 weeks, VLVLY's Forward P/E has been as high as 15.66 and as low as 9.50, with a median of 11.88.

VLVLY is also sporting a PEG ratio of 0.63. 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. VLVLY's PEG compares to its industry's average PEG of 0.91. Over the last 12 months, VLVLY's PEG has been as high as 1.04 and as low as 0.63, with a median of 0.79.

Another valuation metric that we should highlight is VLVLY's P/B ratio of 2.27. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 2.34. Over the past year, VLVLY's P/B has been as high as 3.29 and as low as 2.18, with a median of 2.64.

Finally, we should also recognize that VLVLY has a P/CF ratio of 6.09. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. VLVLY's P/CF compares to its industry's average P/CF of 6.52. Within the past 12 months, VLVLY's P/CF has been as high as 9.50 and as low as 6.09, with a median of 7.99.

These are only a few of the key metrics included in AB Volvo'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, VLVLY looks like an impressive value stock at the moment.


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