Yahoo Finance Should Value Investors Buy Amerigo Resources (ARREF) Stock?
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is Amerigo Resources (ARREF). ARREF is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A.
Another notable valuation metric for ARREF is its P/B ratio of 2.25. 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 3.83. Over the past 12 months, ARREF's P/B has been as high as 2.36 and as low as 1.27, with a median of 1.55.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. ARREF has a P/S ratio of 1.5. This compares to its industry's average P/S of 2.67.
Finally, we should also recognize that ARREF has a P/CF ratio of 10.68. 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. ARREF's current P/CF looks attractive when compared to its industry's average P/CF of 23.62. ARREF's P/CF has been as high as 11.64 and as low as 6.34, with a median of 8.69, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Amerigo Resources is likely undervalued currently. And when considering the strength of its earnings outlook, ARREF sticks out at as one of the market's strongest value stocks.
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Amerigo Resources Ltd. (ARREF) : Free Stock Analysis Report
