Back to top

Image: Bigstock

Is Rayonier Advanced Materials (RYAM) a Great Value Stock Right Now?

Read MoreHide Full Article

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 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.

One company to watch right now is Rayonier Advanced Materials (RYAM - Free Report) . RYAM is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. RYAM has a P/S ratio of 0.17. This compares to its industry's average P/S of 0.32.

Finally, we should also recognize that RYAM has a P/CF ratio of 2.45. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 3.23. RYAM's P/CF has been as high as 6.65 and as low as 0.80, with a median of 3.45, all within the past year.

Another great Paper and Related Products stock you could consider is Veritiv , which is a # 1 (Strong Buy) stock with a Value Score of A.

Shares of Veritiv are currently trading at a forward earnings multiple of 5.82 and a PEG ratio of 0.37 compared to its industry's P/E and PEG ratios of 8.04 and 0.95, respectively.

Over the past year, VRTV's P/E has been as high as 9.62, as low as 4.69, with a median of 7.16; its PEG ratio has been as high as 0.62, as low as 0.30, with a median of -3.14 during the same time period.

Veritiv sports a P/B ratio of 1.96 as well; this compares to its industry's price-to-book ratio of 2.11. In the past 52 weeks, VRTV's P/B has been as high as 3.52, as low as 1.90, with a median of 2.44.

These are only a few of the key metrics included in Rayonier Advanced Materials 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, RYAM and VRTV look like an impressive value stock at the moment.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Rayonier Advanced Materials Inc. (RYAM) - free report >>

Published in