Is Atlas Financial (AFH) Stock Undervalued Right Now?
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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is Atlas Financial (AFH). AFH is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.
Another valuation metric that we should highlight is AFH's P/B ratio of 1.11. 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 company's current P/B looks solid when compared to its industry's average P/B of 1.32. Within the past 52 weeks, AFH's P/B has been as high as 2.81 and as low as 0.94, with a median of 1.29.
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. AFH has a P/S ratio of 0.5. This compares to its industry's average P/S of 1.16.
Value investors will likely look at more than just these metrics, but the above data helps show that Atlas Financial is likely undervalued currently. And when considering the strength of its earnings outlook, AFH sticks out at as one of the market's strongest value stocks.
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Atlas Financial Holdings, Inc. (AFH) : Free Stock Analysis Report
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