Should Value Investors Buy AngloGold (AU) 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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
AngloGold (AU) is a stock many investors are watching right now. AU is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 10.86 right now. For comparison, its industry sports an average P/E of 27.05. Over the past year, AU's Forward P/E has been as high as 20.29 and as low as 6.27, with a median of 11.40.
We should also highlight that AU has a P/B ratio of 1.72. 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. AU's current P/B looks attractive when compared to its industry's average P/B of 2.12. Over the past year, AU's P/B has been as high as 2.36 and as low as 1.11, with a median of 1.52.
These figures are just a handful of the metrics value investors tend to look at, but they help show that AngloGold is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AU feels like a great value stock at the moment.
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