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Here's Why Allison Transmission (ALSN) is a Strong Value Stock

Zacks Equity Research
·2-min read

It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors.

While you may have an investing style you rely on, finding great stocks is made easier with the Zacks Style Scores. These are complementary indicators that rate stocks based on value, growth, and/or momentum characteristics.

Why Investors Should Pay Attention to This Value Stock

Different than growth or momentum investors, value-focused investors are all about finding good stocks at good prices, and discovering which companies are trading under what their true value is before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to help pick out the most attractive and discounted stocks.

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Allison Transmission (ALSN)

Headquartered in Indianapolis, IN, Allison Transmission Holdings, Inc. is a manufacturer of fully-automatic transmissions for medium and heavy-duty commercial and heavy-tactical U.S. defense vehicles. In fact, the company is the largest producer of fully-automatic transmissions, holding the leading position in several niche markets. The firm also offers electric hybrid and fully electric propulsion systems.

ALSN is a Zacks Rank #2 (Buy) stock, with a Value Style Score of A and VGM Score of A. Shares are currently trading at a forward P/E of 7.1X for the current fiscal year compared to the Automotive - Original Equipment industry's P/E of 12.7X. Additionally, ALSN has a PEG Ratio of 1 and a Price/Cash Flow ratio of 6.2X. Value investors should also note ALSN's Price/Sales ratio of 1.5X.

A company's earnings performance is important for value investors as well. For fiscal 2023, six analysts revised their earnings estimate higher in the last 60 days for ALSN, while the Zacks Consensus Estimate has increased $0.48 to $6.51 per share. ALSN also holds an average earnings surprise of 12.8%.

ALSN should be on investors' short lists because of its impressive earnings and valuation fundamentals, a good Zacks Rank, and strong Value and VGM Style Scores.

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Allison Transmission Holdings, Inc. (ALSN) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research