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Zacks

Are Investors Undervaluing AngloGold (AU) Right Now?

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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 company to watch right now is AngloGold (AU). AU is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 9.38, which compares to its industry's average of 20.29. Over the past 52 weeks, AU's Forward P/E has been as high as 20.22 and as low as 7.64, with a median of 10.64.

We should also highlight that AU has a P/B ratio of 3.77. The P/B is a method of comparing a stock's market value to 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 6.65. Over the past 12 months, AU's P/B has been as high as 5.16 and as low as 2.18, with a median of 3.48.

These are just a handful of the figures considered in AngloGold's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that AU is an impressive value stock right now.


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