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Should Value Investors Buy These Basic Materials Stocks?
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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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is Clearwater Paper (CLW - Free Report) . CLW is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CLW has a P/S ratio of 0.28. This compares to its industry's average P/S of 0.57.
Finally, our model also underscores that CLW has a P/CF ratio of 6.46. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. CLW's current P/CF looks attractive when compared to its industry's average P/CF of 8.23. Over the past year, CLW's P/CF has been as high as 8.20 and as low as 2.51, with a median of 5.05.
Investors could also keep in mind Mercer International (MERC - Free Report) , an Paper and Related Products stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.
Additionally, Mercer International has a P/B ratio of 1.38 while its industry's price-to-book ratio sits at 4.54. For MERC, this valuation metric has been as high as 2.02, as low as 1.04, with a median of 1.25 over the past year.
These are just a handful of the figures considered in Clearwater Paper and Mercer International'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 CLW and MERC is an impressive value stock right now.
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Should Value Investors Buy These Basic Materials Stocks?
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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is Clearwater Paper (CLW - Free Report) . CLW is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CLW has a P/S ratio of 0.28. This compares to its industry's average P/S of 0.57.
Finally, our model also underscores that CLW has a P/CF ratio of 6.46. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. CLW's current P/CF looks attractive when compared to its industry's average P/CF of 8.23. Over the past year, CLW's P/CF has been as high as 8.20 and as low as 2.51, with a median of 5.05.
Investors could also keep in mind Mercer International (MERC - Free Report) , an Paper and Related Products stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.
Additionally, Mercer International has a P/B ratio of 1.38 while its industry's price-to-book ratio sits at 4.54. For MERC, this valuation metric has been as high as 2.02, as low as 1.04, with a median of 1.25 over the past year.
These are just a handful of the figures considered in Clearwater Paper and Mercer International'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 CLW and MERC is an impressive value stock right now.