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Is Ally Financial (ALLY) a Great Value Stock Right Now?

Zacks

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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system’s “Value” category. Stocks with both “A” grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company value investors might notice is Ally Financial (ALLY). ALLY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.


We should also highlight that ALLY has a P/B ratio of 0.84. 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 0.96. Within the past 52 weeks, ALLY’s P/B has been as high as 1.01 and as low as 0.77, with a median of 0.88.

Finally, we should also recognize that ALLY has a P/CF ratio of 3.94. This figure highlights a company’s operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. ALLY’s current P/CF looks attractive when compared to its industry’s average P/CF of 5.83. Over the past year, ALLY’s P/CF has been as high as 4.92 and as low as 3.60, with a median of 4.26.

These are only a few of the key metrics included in Ally Financial’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, ALLY looks like an impressive value stock at the moment.


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