While the documented Zacks Rank emphasizes earnings estimates and estimated revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we always look at trends in value, growth and momentum to discover large companies.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven successful in all possible market environments. Value investors use a variety of methods, including tried and true valuation measurements, to find these stocks.
On top of 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” ratings for value will be some of the highest quality stocks on the market today.
Ameriprise Financial Services (AMP – Free report) is a stock that many investors are seeing right now. AMP currently has a Zacks rank of # 1 (strong buy) and an A for value. The stock is trading at a P / E ratio of 10.86 right now. By comparison, its industry has an average P / E of 13.48. AMP’s Forward P / E has been as high as 11.20 and as low as 4.69, with a median of 9.04, all within the past year.
Value investors also use the P / S ratio. The P / S ratio is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate in an income statement, so they are often considered a better performance indicator. AMP has a P / S ratio of 2.16. This is comparable to the industry average P / S of 3.14.
Finally, investors should note that AMP has a P / CF ratio of 15.27. This data point takes into account a company’s operational cash flow and is often used to find companies that are undervalued when considering their solid cash prospects. AMP’s P / CF compares with the industry average P / CF of 36.66. Within the last 12 months, AMP’s P / CF has been as high as 15.30 and as low as 3.11 with a median of 7.38.
These are just a few of the key metrics included in Ameriprise Financial Services’ strong Value rating, but they help show that the stock is likely to be undervalued right now. Taking into account the strength of its earnings prospects, AMP looks like an impressive security at the moment.
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