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Should Value Investors Buy Alpha Metallurgical Resources (AMR) 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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.

Alpha Metallurgical Resources (AMR - Free Report) is a stock many investors are watching right now. AMR is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 4.47, which compares to its industry's average of 10.84. Over the last 12 months, AMR's Forward P/E has been as high as 5.84 and as low as 1.75, with a median of 2.88.

We should also highlight that AMR has a P/B ratio of 2.02. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 3.59. Over the past 12 months, AMR's P/B has been as high as 4.60 and as low as 1.53, with a median of 2.05.

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. AMR has a P/S ratio of 0.67. This compares to its industry's average P/S of 1.97.

Investors could also keep in mind Anglo American (NGLOY - Free Report) , an Mining - Miscellaneous stock with a Zacks Rank of # 2 (Buy) and Value grade of A.

Furthermore, Anglo American holds a P/B ratio of 1.35 and its industry's price-to-book ratio is 3.59. NGLOY's P/B has been as high as 2.13, as low as 1.06, with a median of 1.50 over the past 12 months.

Value investors will likely look at more than just these metrics, but the above data helps show that Alpha Metallurgical Resources and Anglo American are likely undervalued currently. And when considering the strength of its earnings outlook, AMR and NGLOY sticks out as one of the market's strongest value stocks.


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