Should Value Investors Buy Associated BancCorp (ASB) 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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 Associated BancCorp (ASB). ASB is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 9.63 right now. For comparison, its industry sports an average P/E of 10.17. Over the past year, ASB's Forward P/E has been as high as 12.55 and as low as 7.57, with a median of 9.70.

Another notable valuation metric for ASB is its P/B ratio of 0.95. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. ASB's current P/B looks attractive when compared to its industry's average P/B of 2.17. Within the past 52 weeks, ASB's P/B has been as high as 1.01 and as low as 0.70, with a median of 0.86.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. ASB has a P/S ratio of 1.78. This compares to its industry's average P/S of 2.23.

These are just a handful of the figures considered in Associated BancCorp'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 ASB is an impressive value stock right now.

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Associated Banc-Corp (ASB): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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