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Are Investors Undervaluing Autoliv (ALV) Right Now?

Zacks Equity Research
AptarGroup's (ATR) performance will be supported by business-transformation plan, product roll outs and acquisitions despite elevated costs.

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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

One stock to keep an eye on is Autoliv (ALV). ALV is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 10.87 right now. For comparison, its industry sports an average P/E of 11.45. Over the last 12 months, ALV's Forward P/E has been as high as 21.15 and as low as 10.54, with a median of 18.39.

Investors will also notice that ALV has a PEG ratio of 0.65. 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. ALV's industry currently sports an average PEG of 1.02. ALV's PEG has been as high as 2.98 and as low as 0.63, with a median of 2.09, all within the past year.

Investors should also recognize that ALV has a P/B ratio of 1.87. The P/B ratio is used to compare a stock's market value with 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 2.82. ALV's P/B has been as high as 3.20 and as low as 1.84, with a median of 2.67, over the past year.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Autoliv is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ALV feels like a great value stock at the moment.


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