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Are Investors Undervaluing Sociedad Quimica y Minera (SQM) 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 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.

Sociedad Quimica y Minera (SQM - Free Report) is a stock many investors are watching right now. SQM is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 6.81 right now. For comparison, its industry sports an average P/E of 8.63. Over the last 12 months, SQM's Forward P/E has been as high as 9.53 and as low as 4.83, with a median of 6.33.

We also note that SQM holds a PEG ratio of 0.46. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. SQM's industry has an average PEG of 1.22 right now. SQM's PEG has been as high as 0.56 and as low as 0.33, with a median of 0.43, all within the past year.

Finally, investors should note that SQM has a P/CF ratio of 5.63. 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. SQM's P/CF compares to its industry's average P/CF of 6.64. Within the past 12 months, SQM's P/CF has been as high as 15.56 and as low as 4.69, with a median of 7.12.

These are only a few of the key metrics included in Sociedad Quimica y Minera'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, SQM looks like an impressive value stock at the moment.


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