Are Investors Undervaluing Alliance Resource Partners (ARLP) Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
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.
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 value investors might notice is Alliance Resource Partners (ARLP). ARLP is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 3.41 right now. For comparison, its industry sports an average P/E of 4.22. Over the past year, ARLP's Forward P/E has been as high as 6.82 and as low as 3.37, with a median of 4.61.
Finally, we should also recognize that ARLP has a P/CF ratio of 3.15. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. ARLP's P/CF compares to its industry's average P/CF of 3.40. Over the past 52 weeks, ARLP's P/CF has been as high as 5.91 and as low as 2.96, with a median of 4.46.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Alliance Resource Partners is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ARLP feels like a great value stock at the moment.
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Alliance Resource Partners, L.P. (ARLP) : Free Stock Analysis Report
