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Should Value Investors Buy Star Bulk Carriers (SBLK) 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.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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.

One company value investors might notice is Star Bulk Carriers (SBLK - Free Report) . SBLK is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock holds a P/E ratio of 5.43, while its industry has an average P/E of 6.26. SBLK's Forward P/E has been as high as 12.17 and as low as 4.73, with a median of 6.18, all within the past year.

Another notable valuation metric for SBLK is its P/B ratio of 1.21. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.41. Over the past 12 months, SBLK's P/B has been as high as 1.26 and as low as 0.88, with a median of 1.07.

Finally, investors will want to recognize that SBLK has a P/CF ratio of 6.48. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 7.02. Over the past year, SBLK's P/CF has been as high as 6.76 and as low as 2.90, with a median of 3.95.

These are only a few of the key metrics included in Star Bulk Carriers'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, SBLK looks like an impressive value stock at the moment.


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