By Jonathan Yates
Which stock has the highest analyst rating possible with low valuations?
Hint: it's located in a region that rhymes with "bureau moan," and features revenue growth and a debt position of strong interest to anyone looking for bargains in down sectors.
In a recent article in Forbes magazine, Wells Fargo CEO John Strumpf stated that revenue growth was a vital financial indicator to be considered in investing. Meanwhile, Warren Buffett has observed that investors should beware of debt and be willing to take a contrary position.
AEGON N.V. (AEG) offers all this and much more to investors.
AEGON is a Dutch insurance company that was founded in 1983 from the merger of AGO Holding N.V. and Ennia N.V., and is now one of the world's largest life insurance and pension groups.
It has recovered strongly since being bailed out by the Dutch government during the Great Recession, up 42.04% for 2012.
However, European financial institutions are not currently in favor with investors; the exchange traded fund for the sector, iShares MSCI Europe Financials Index (EUFN), is down by 20.81% over the last year of market action, falling 3.55% in the last week of trading.
But AEGON offers a high projected earnings growth rate with low present valuations, which is a bullish set-up. Debt is also modest. The price-to-book ratio is 0.29. The price-to-sales ratio is 0.26. For the next year, analysts expect earnings-per-share growth to be over 50%. Over the next five years, earnings-per-share growth is estimated to reach 26.10%.
Also bullish for AEGON is the miniscule short position against the stock. A short position of 5% is considered to be troubling. AEGON NV has a short position of just 0.12%.
Also bullish for the stock is that AEGON receives the best mean analyst rating possible of 1, with 5 being the worst.
Given that the European debt crisis is nowhere near over, as detailed in many previous articles, AEGON NV is an opportunity for investors to pick up a stock during a sector decline. The above average dividend yield of AEGON NV will pay for the wait until recovery.