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Should Value Investors Buy Peabody Energy (BTU) 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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
Peabody Energy (BTU - Free Report) is a stock many investors are watching right now. BTU is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 5.23, which compares to its industry's average of 6.34. Over the past year, BTU's Forward P/E has been as high as 8.91 and as low as 3.57, with a median of 5.62.
Another valuation metric that we should highlight is BTU's P/B ratio of 0.95. The P/B ratio pits a stock's market value against 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 1.69. Within the past 52 weeks, BTU's P/B has been as high as 1.30 and as low as 0.74, with a median of 0.90.
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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. BTU has a P/S ratio of 0.64. This compares to its industry's average P/S of 1.04.
Finally, investors will want to recognize that BTU has a P/CF ratio of 2.43. 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. BTU's current P/CF looks attractive when compared to its industry's average P/CF of 4.04. Over the past 52 weeks, BTU's P/CF has been as high as 2.98 and as low as 1.45, with a median of 2.16.
Value investors will likely look at more than just these metrics, but the above data helps show that Peabody Energy is likely undervalued currently. And when considering the strength of its earnings outlook, BTU sticks out at as one of the market's strongest value stocks.
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Should Value Investors Buy Peabody Energy (BTU) Stock?
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.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
Peabody Energy (BTU - Free Report) is a stock many investors are watching right now. BTU is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 5.23, which compares to its industry's average of 6.34. Over the past year, BTU's Forward P/E has been as high as 8.91 and as low as 3.57, with a median of 5.62.
Another valuation metric that we should highlight is BTU's P/B ratio of 0.95. The P/B ratio pits a stock's market value against 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 1.69. Within the past 52 weeks, BTU's P/B has been as high as 1.30 and as low as 0.74, with a median of 0.90.
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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. BTU has a P/S ratio of 0.64. This compares to its industry's average P/S of 1.04.
Finally, investors will want to recognize that BTU has a P/CF ratio of 2.43. 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. BTU's current P/CF looks attractive when compared to its industry's average P/CF of 4.04. Over the past 52 weeks, BTU's P/CF has been as high as 2.98 and as low as 1.45, with a median of 2.16.
Value investors will likely look at more than just these metrics, but the above data helps show that Peabody Energy is likely undervalued currently. And when considering the strength of its earnings outlook, BTU sticks out at as one of the market's strongest value stocks.