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Should Value Investors Buy American Equity Investment (AEL) Stock?


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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 stock to keep an eye on is American Equity Investment (AEL). AEL is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 9.20, while its industry has an average P/E of 9.57. AEL's Forward P/E has been as high as 11.61 and as low as 8.09, with a median of 9.89, all within the past year.

Investors should also recognize that AEL has a P/B ratio of 1.25. 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 1.84. Within the past 52 weeks, AEL's P/B has been as high as 1.39 and as low as 0.92, with a median of 1.10.

Value investors will likely look at more than just these metrics, but the above data helps show that American Equity Investment is likely undervalued currently. And when considering the strength of its earnings outlook, AEL sticks out at as one of the market's strongest value stocks.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Investing Ideas , Stocks
Referenced Symbols: AEL



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