Are Investors Undervaluing Amerigo Resources (ARREF) 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.

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

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Amerigo Resources (ARREF) is a stock many investors are watching right now. ARREF is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

Another valuation metric that we should highlight is ARREF's P/B ratio of 2.05. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. ARREF's current P/B looks attractive when compared to its industry's average P/B of 3.77. Over the past 12 months, ARREF's P/B has been as high as 2.05 and as low as 1.27, with a median of 1.54.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. ARREF has a P/S ratio of 1.32. This compares to its industry's average P/S of 2.61.

Finally, investors will want to recognize that ARREF has a P/CF ratio of 9.02. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 22.75. Over the past year, ARREF's P/CF has been as high as 11.64 and as low as 6.34, with a median of 8.55.

These are only a few of the key metrics included in Amerigo Resources's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, ARREF looks like an impressive value stock at the moment.

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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.

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