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Should Value Investors Buy Peabody Energy (BTU) Stock?
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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is Peabody Energy (BTU - Free Report) . BTU is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value.
Investors should also recognize that BTU has a P/B ratio of 0.79. 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. BTU's current P/B looks attractive when compared to its industry's average P/B of 1.41. BTU's P/B has been as high as 0.99 and as low as 0.73, with a median of 0.87, over the past year.
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 0.65. This compares to its industry's average P/S of 0.82.
Finally, investors should note that BTU has a P/CF ratio of 3.69. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 5.14. Over the past year, BTU's P/CF has been as high as 4.06 and as low as 1.91, with a median of 3.34.
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?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is Peabody Energy (BTU - Free Report) . BTU is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value.
Investors should also recognize that BTU has a P/B ratio of 0.79. 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. BTU's current P/B looks attractive when compared to its industry's average P/B of 1.41. BTU's P/B has been as high as 0.99 and as low as 0.73, with a median of 0.87, over the past year.
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 0.65. This compares to its industry's average P/S of 0.82.
Finally, investors should note that BTU has a P/CF ratio of 3.69. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 5.14. Over the past year, BTU's P/CF has been as high as 4.06 and as low as 1.91, with a median of 3.34.
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.