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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
Alliance Resource Partners (ARLP) is a stock many investors are watching right now. ARLP is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 3.12, while its industry has an average P/E of 3.66. Over the last 12 months, ARLP's Forward P/E has been as high as 6.82 and as low as 2.99, with a median of 4.55.
Investors should also recognize that ARLP has a P/B ratio of 1.47. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.51. Over the past year, ARLP's P/B has been as high as 2.48 and as low as 1.41, with a median of 1.91.
Finally, investors will want to recognize that ARLP has a P/CF ratio of 2.84. 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. This stock's P/CF looks attractive against its industry's average P/CF of 2.99. Over the past year, ARLP's P/CF has been as high as 5.91 and as low as 2.72, with a median of 4.45.
These are just a handful of the figures considered in Alliance Resource Partners's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that ARLP is an impressive value stock right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report