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Is Cabot (CBT) Stock Undervalued Right Now?

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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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company to watch right now is Cabot (CBT - Free Report) . CBT is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 13.27 right now. For comparison, its industry sports an average P/E of 16.19. CBT's Forward P/E has been as high as 14.37 and as low as 10.32, with a median of 12.31, all within the past year.

Investors should also note that CBT holds a PEG ratio of 0.90. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CBT's PEG compares to its industry's average PEG of 1.11. Over the last 12 months, CBT's PEG has been as high as 2.66 and as low as 0.79, with a median of 0.99.

Finally, our model also underscores that CBT has a P/CF ratio of 8.99. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. CBT's P/CF compares to its industry's average P/CF of 11.13. Over the past year, CBT's P/CF has been as high as 9.54 and as low as 6.25, with a median of 8.33.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Cabot is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CBT feels like a great value stock at the moment.


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