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Is AngloGold (AU) Stock Undervalued Right Now?

Zacks Equity Research
·2-min read

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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 stock to keep an eye on is AngloGold (AU). AU 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 12.64 right now. For comparison, its industry sports an average P/E of 22.26. Over the last 12 months, AU's Forward P/E has been as high as 20.22 and as low as 7.64, with a median of 10.93.

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Investors should also note that AU holds a PEG ratio of 0.58. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. AU's industry currently sports an average PEG of 1.55. Over the last 12 months, AU's PEG has been as high as 2.28 and as low as 0.26, with a median of 0.34.

We should also highlight that AU has a P/B ratio of 4.79. The P/B ratio pits a stock's market value against 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 6.65. Over the past 12 months, AU's P/B has been as high as 4.79 and as low as 2.18, with a median of 3.10.

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


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Zacks Investment Research