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Is Mercer International (MERC) Stock Undervalued Right Now?

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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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 stock to keep an eye on is Mercer International (MERC - Free Report) . MERC is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 5.13, which compares to its industry's average of 7.23. Over the past year, MERC's Forward P/E has been as high as 8.42 and as low as 4.76, with a median of 5.68.

Finally, our model also underscores that MERC has a P/CF ratio of 2.43. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. MERC's current P/CF looks attractive when compared to its industry's average P/CF of 4.92. Over the past 52 weeks, MERC's P/CF has been as high as 8.35 and as low as 2.32, with a median of 3.45.

Another great Paper and Related Products stock you could consider is Veritiv , which is a # 2 (Buy) stock with a Value Score of A.

Shares of Veritiv are currently trading at a forward earnings multiple of 7.69 and a PEG ratio of 0.51 compared to its industry's P/E and PEG ratios of 7.23 and 0.61, respectively.

VRTV's Forward P/E has been as high as 19.54 and as low as 7.69, with a median of 12.13. During the same time period, its PEG ratio has been as high as 0.57, as low as 0.49, with a median of 0.53.

Furthermore, Veritiv holds a P/B ratio of 2.92 and its industry's price-to-book ratio is 0.89. VRTV's P/B has been as high as 4.10, as low as 1.30, with a median of 2.51 over the past 12 months.

These are only a few of the key metrics included in Mercer International and Veritiv strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, MERC and VRTV look like an impressive value stock at the moment.


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