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Should Value Investors Buy Warrior Met Coal (HCC) Stock?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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.

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 Warrior Met Coal (HCC - Free Report) . HCC is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A.

Investors should also recognize that HCC has a P/B ratio of 1.36. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. HCC's current P/B looks attractive when compared to its industry's average P/B of 1.53. Over the past 12 months, HCC's P/B has been as high as 2.05 and as low as 1.08, with a median of 1.35.

Finally, our model also underscores that HCC has a P/CF ratio of 2.57. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. HCC's current P/CF looks attractive when compared to its industry's average P/CF of 2.82. HCC's P/CF has been as high as 4.57 and as low as 1.81, with a median of 2.36, all within the past year.

Value investors will likely look at more than just these metrics, but the above data helps show that Warrior Met Coal is likely undervalued currently. And when considering the strength of its earnings outlook, HCC sticks out at as one of the market's strongest value stocks.


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