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Should Value Investors Buy Lundin Mining (LUNMF) Stock?

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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.

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.

Lundin Mining (LUNMF - Free Report) is a stock many investors are watching right now. LUNMF 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 10.17 right now. For comparison, its industry sports an average P/E of 22.84. Over the last 12 months, LUNMF's Forward P/E has been as high as 16.52 and as low as 3.92, with a median of 9.40.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. LUNMF has a P/S ratio of 1.67. This compares to its industry's average P/S of 2.13.

Finally, we should also recognize that LUNMF has a P/CF ratio of 5.15. 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. This stock's P/CF looks attractive against its industry's average P/CF of 12.28. Over the past year, LUNMF's P/CF has been as high as 5.92 and as low as 2.81, with a median of 4.26.

These are only a few of the key metrics included in Lundin Mining's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, LUNMF looks like an impressive value stock at the moment.


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