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Is Norsk Hydro ASA (NHYDY) a Great Value Stock Right Now?

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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, 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.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company value investors might notice is Norsk Hydro ASA (NHYDY - Free Report) . NHYDY is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. NHYDY has a P/S ratio of 0.67. This compares to its industry's average P/S of 0.9.

Finally, investors should note that NHYDY has a P/CF ratio of 8.43. 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. This stock's P/CF looks attractive against its industry's average P/CF of 27.87. NHYDY's P/CF has been as high as 9.62 and as low as 6.20, with a median of 7.76, all within the past year.

These are just a handful of the figures considered in Norsk Hydro ASA's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that NHYDY is an impressive value stock right now.


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