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Should Value Investors Buy Peabody Energy (BTU) 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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 Peabody Energy (BTU - Free Report) . BTU is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value.
Another notable valuation metric for BTU is its P/B ratio of 0.82. Investors use the P/B ratio to look at a stock's market value versus 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 1.44. Within the past 52 weeks, BTU's P/B has been as high as 0.99 and as low as 0.77, with a median of 0.87.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. BTU has a P/S ratio of 0.65. This compares to its industry's average P/S of 0.91.
Finally, our model also underscores that BTU has a P/CF ratio of 3.61. 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 4.66. BTU's P/CF has been as high as 4.06 and as low as 1.91, with a median of 3.29, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Peabody Energy is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BTU feels like a great value stock at the moment.
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Should Value Investors Buy Peabody Energy (BTU) Stock?
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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 Peabody Energy (BTU - Free Report) . BTU is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value.
Another notable valuation metric for BTU is its P/B ratio of 0.82. Investors use the P/B ratio to look at a stock's market value versus 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 1.44. Within the past 52 weeks, BTU's P/B has been as high as 0.99 and as low as 0.77, with a median of 0.87.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. BTU has a P/S ratio of 0.65. This compares to its industry's average P/S of 0.91.
Finally, our model also underscores that BTU has a P/CF ratio of 3.61. 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 4.66. BTU's P/CF has been as high as 4.06 and as low as 1.91, with a median of 3.29, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Peabody Energy is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BTU feels like a great value stock at the moment.