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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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company to watch right now is American International Group (AIG). AIG is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 9.04 right now. For comparison, its industry sports an average P/E of 9.21. Over the past 52 weeks, AIG's Forward P/E has been as high as 12.57 and as low as 8.68, with a median of 10.43.
Investors will also notice that AIG has a PEG ratio of 0.90. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. AIG's industry has an average PEG of 1.33 right now. Within the past year, AIG's PEG has been as high as 1.26 and as low as 0.87, with a median of 1.04.
We should also highlight that AIG has a P/B ratio of 0.71. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.58. Over the past 12 months, AIG's P/B has been as high as 0.89 and as low as 0.58, with a median of 0.73.
Finally, investors will want to recognize that AIG has a P/CF ratio of 2.95. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 7.51. AIG's P/CF has been as high as 6.12 and as low as -282.61, with a median of 4.43, all within the past year.
These are only a few of the key metrics included in American International Group'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, AIG looks like an impressive value stock at the moment.
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